Retracements measure pullbacks within a trend; extensions project where price may travel beyond the prior swing. The three workhorse extension ratios are 1.272 (√1.618), 1.618 (the golden ratio), and 2.618 (1.618²). Each is derived by multiplying the prior swing range and adding it to the retracement low (uptrend) or subtracting from the retracement high (downtrend).

Extensions are not predictions — they are probability zones where prior waves have historically terminated. Confluence matters: an extension that aligns with a prior swing high, a round number, or a Fibonacci cluster carries more weight than one standing alone.

1.272 — shallow extension, common in strong trends
1.618 — primary target, most frequently cited
2.618 — terminal extension, often marks wave 5 or C

Ratio	Math	Typical Use
1.272	√1.618	Wave 3 minimum
1.618	φ	Wave 3 / 5 target
2.618	φ²	Wave 5 / C exhaustion