Fibonacci Expansion

Expansion, in the sense used here, sizes the break beyond the old high or low in units of the correction that just ended. A shallow pullback produces tight expansion levels, because there was little correction to multiply. A deep pullback produces distant ones. That is the operational difference from a projection, which multiplies the impulse instead of the pullback. Some books and platforms swap these names. The glossary keeps both entries because both words are in wide use, and the only safe habit is to know which distance, the leg or the correction, your tool is multiplying.

A 100 percent expansion beyond B, equal to the pullback, is a modest objective just past the breakout. It suits a market that has already travelled and is breaking an old high with a small base. Larger ratios, 1.618 times the pullback beyond B, suit a deeper base and ask for a larger follow-through. If your software's "expansion" tool asks for three points and multiplies A to B from C, you are looking at a projection. Use that page. Do not apply both sets of numbers from two different definitions and call the cluster confluence. You measured the same swing twice.

Use expansion levels as profit-taking candidates once price clears B, the prior extreme. Partial out at the first expansion that lines up with another level. If the pullback was very shallow, the expansion levels will be close to B and may be inside the noise of the breakout. In that case the impulse projection is the more useful ruler. Match the tool to the depth of the correction.

Quoting an "expansion target" without saying whether you multiplied the leg or the pullback. Another trader cannot check your work. Also treating a cluster of expansion and projection lines from the same three anchors as independent evidence. They are two formulas on one swing.

When the pullback is a single spike, the unit B - C is mostly noise and the expansion levels are arbitrary. When the pullback is long and complex, one C is hard to define. Expansion inherits every limit of hand-picked swings. It adds nothing about volume or about the level sitting just beyond B.