Fibonacci extension levels in the MetaTrader 4 trading platform are available in two types of grids: “Fibonacci Lines”, which include both retracement levels and standard extension levels, and “Fibonacci Extension”, which shows only extension levels—Fibonacci projections. We will skip the retracement levels and focus solely on the extensions.
Standard Fibonacci Extension Grid
In MetaTrader 4, the Standard Fibonacci Extension grid is accessed via the “Fibonacci Lines” button on the toolbar. This grid displays both retracements—from 0% to 100%—and extensions. By default, the extension levels are set at 161.8%, 261.8%, and 423.6%. Other commonly used Fibonacci levels include 123.6%, 138.2%, 150%, 200%, 238.2%, 323.6%, and 400%.
The grid shown in the second image contains many more levels. This raises the question of which levels to use in practice and what each level represents.
Generally, working with the default extension levels is sufficient for exiting trades if you use Fibonacci tools to set Take Profit targets. Overloading the chart with too many levels usually does not add value.
Fibonacci Extensions According to Joe DiNapoli
Another method to calculate impulse wave targets is the Fibonacci extensions proposed by Joe DiNapoli. His grid is also constructed based on the first wave, but the levels are measured from the end of the correction, as illustrated in the third image.
DiNapoli chose to include only four extension levels to keep the chart clean while retaining the key levels. In the third image, you can see the 61.8% level of the impulse wave measured from the end of the correction, followed by 100%, 161.8%, and finally 261.8%.
These levels are named as follows:
- 61.8% – Contracted Objective Point (COP),
- 100% – Objective Point (OP),
- 161.8% – eXpanded Objective Point (XOP),
- 261.8% – super eXpanded Objective Point (SXOP).
This set of levels is sufficient for setting Take Profits and for partial position exits at each level. A notable advantage of DiNapoli’s grid is that it accounts for the size of the correction, whereas the standard Fibonacci grid considers only the impulse length.
Thus, we have reviewed two different extension grids: the more popular Fibonacci grid and the DiNapoli grid. Both can be effectively used in trading, but it is advisable to choose the one that best fits your trading strategy individually.
