Commander in Pips: You did all things correctly. But here some important notifications to Fibonacci extensions: 1. You never can say definitely where the market will show a major reversal - at 0.618, 1.0 or 2.186 level. All that you can say, that there is a solid probability that any of these extension levels will act as support or resistance (depending on direction), at least temporally. 2. Still there are some methods that exist which allow us make some assumption about how far the market could move – 0.618, 1.0 or even 2.618. It depends on trend strength. We will talk about it in later chapters; 3. There is some uncertainty existing about which points to use as “X”, “A” and “B”. But after some time when you will get more experience you will better understand how to recognize the most important of them; 4. Still… - The extension from major low of the swing (X point) always significant; - The extension from strong thrust move is more significant than an extension from a slower move; - It is preferable (but not absolutely necessary), that B point should be at least at the 0.382 retracement levels. Other words, AB retracement move should be easily viewed. - The most recent expansion very often becomes important. - “B” point should be always inside XA swing and after the “A” point in time, when you are dealing with expansions for profit taking. Some more information we will uncover in the advanced part that is dedicated to Fib expansions. P.S. This lesson was written by Sive Morten, who has been working for a large European Bank since April of 2000, and is currently a supervisor of the bank's risk assessment department. Sive's knowledge of forex market and banking industry is vast and quite complete. If you have any specific questions about forex, banking industry, or any other financial instruments, please post them on the next page and Sive should answer soon. Note: FPA ranks are earned in the battles against scam, not in the classroom.