Charts  Fibonacci
There is a special ratio that can be used to describe the proportions of everything from nature's smallest building blocks, such as atoms, to the most advanced patterns in the universe, such as unimaginably large celestial bodies. Nature relies on this innate proportion to maintain balance, but the financial markets also seem to conform to this golden ratio.
Every year new methods are developed for traders to take advantage of the uncanny tendencies of the market toward derivatives of the golden ratio. In this section we will discuss some of the more popular nonmainstream uses of Fibonacci, including extensions, clusters and Gartleys, and we'll take a look at how to use them in conjunction with other patterns and indicators. (For a primer and background on basic Fibonacci techniques, refer to Fibonacci And The Golden Ratio.)
Fibonacci Extensions
Fibonacci extensions are simply ratioderived extensions beyond the standard 100% Fibonacci retracement level. They are popular as forecasting tools, and they are often used in combination with other technical chart patterns.
Figure 1 below shows a typical implementation of a Fibonacci extension forecast:

Figure 1: An example of how the Fibonacci extension levels of 161.8% and 261.8% act as future areas of support and resistance. 
Source: Tradecision 
Many traders use this technique in conjunction with wavebased studies  such as the Elliott Wave or Wolfe Wave  to estimate the height of each wave and more clearly define the different waves. (To learn more about Elliott Waves, see Elliott Wave Theory, and for more information on Wolfe Waves, see Advanced Channeling Patterns: Wolfe Waves And Gartleys.)
Fibonacci extensions are also commonly used with other chart patterns such as the ascending triangle. Once the pattern is identified, a forecast can be created by adding 61.8% of the distance between the upper resistance and the base of the triangle to the entry price. As shown in Figure 2 below, these levels are generally used as strategic places for traders to consider taking profits.

Figure 2: Many traders use the 161.8% Fibonacci extension level as a price target for when a security breaks out of an identified chart pattern. 
Source: Tradecision 
Fibonacci Clusters
The Fibonacci cluster is a culmination of Fibonacci retracements from various significant highs and lows during a given time period. Each of these Fibonacci levels is then plotted on the "Y" axis (price). Each overlapping retracement level makes a darker shade on the cluster  the darker the cluster is, the more significant the support or resistance level tends to be.

Figure 3: An example of Fibonacci clusters is shown on the right side of the chart. Dark stripes are considered to be more influential levels of support and resistance than light ones. Notice the strong resistance just above the $20 level. 
Source: Tradecision 
Many traders use clusters as a way to quickly gauge support and resistance levels. A popular technique is to combine a "volume by price" graph on the left side, with a cluster on the right side. This allows you to see which specific Fibonacci areas represent significant levels of support and/or resistance  highvolume and dense cluster areas indicate key support and resistance levels.
This technique can be used in conjunction with other Fibonacci techniques or chart patterns to confirm support and resistance levels. (For other ways of analyzing these levels, see Gauging Support And Resistance With Price By Volume.)
The Gartley Pattern
The Gartley pattern is a less popular pattern combining the "M" and "W" tops and bottoms with various Fibonacci levels. The result is a reliable indicator of future price movements. Figure 4 demonstrates what the Gartley formation looks like.

Figure 4: An example of what bullish and bearish Gartley patterns look like. 
Source: www.harmonictrader.com 
X to D  Must be 78.6% of the segment range XA
X to B  Must be near 61.8% of the XA segment
B to D  Must be between 127% and 161.8% of the range BC
A to C  Must be 38.2% of segment XA or 88.6% of segment AB
How can these distances be measured? Well, one way is to use Fibonacci retracements and extensions to estimate the points. Many traders also use custom software, which often includes tools developed specifically to identify and trade the Gartley pattern. (You can also download a free Excelbased spreadsheet from ChartSetups.com to calculate the numbers)
Fibonacci Channels
The Fibonacci pattern can be applied to channels not only vertically, but also diagonally, as shown in Figure 5.

Figure 5: Fibonacci retracement when used in combination with Fibonacci channels can give a trader extra confirmation that a certain price level will act as support or resistance. 
Source: MetaTrader 
Again, the same concepts that apply to vertical retracements apply to these channels. One common technique employed by traders is the combination of diagonal and vertical Fibonacci studies to find areas where both indicate significant resistance. This can be a sign of a continuation of the prevailing trend.
Putting It All Together
By combining indicators and chart patterns with the many Fibonacci tools available, you can increase your chances of a successful trade. Remember, there is no one indicator that predicts everything perfectly (if there were, we'd all be rich). However, when many indicators are pointing in the same direction, you can get a pretty good idea of where the price is going.

Retirement
A Guide to Arizona's State Retirement System
The Arizona State Retirement System offers a definedbenefit plan for former teachers, state workers and public employees. 
Mutual Funds & ETFs
2 Reasons to Be Wary of New ETFs (IFLY, EQLT)
Pay attention to the number of thematic and smart beta ETFs that may fail to survive as a result of poor performance and thin trading volume. 
Forex
Global Utilities: Exploring Revenue Trends & Fundamentals
Analyze global revenue exposure in the utilities sector to learn about the impact of currency, regulation and economic growth on geographic contributions. 
Home & Auto
4 Alternatives to a Traditional Mortgage
If you can't qualify for or don't want a traditional mortgage, one of these options might be right for you. 
Home & Auto
Understanding Mortgage Impound Accounts
Home buyers with low down payments may get stuck with higher mortgage payments. Find out what you get for the extra money. 
Investing
Municipal Bonds Offer Something More for Everyone
Are municipal bonds really for me? The popular perception is that taxexempt income only benefits those investors in the highest tax brackets. 
Retirement
5 Top Alternatives to a Reverse Mortgage
If you have substantial home equity and don't want to do a reverse mortgage to tap it for retirement expenses, cost out these viable alternatives. 
Credit & Loans
What Is an AltA Mortgage?
Called "liar loans" for their low documentation requirements, AltA mortgages were hot until the subprime crisis. Now Wall Street wants to bring them back. 
Home & Auto
Understanding MortgageBacked Securities
Find out the meaning of this popular assetbacked security and its benefits for banks and investors. 
Investing
Berkshire Hathaway Stock: Capital Structure Analysis (BRK.A)
Review the capital structure of Berkshire Hathaway, and understand how equity and debt capitalization and enterprise value may interact with each other.

Primary Mortgage Market
The market where borrowers and mortgage originators come together ... 
100% Mortgage
A mortgage loan in which the borrower receives a loan amount ... 
Reverse Mortgage
A type of mortgage in which a homeowner can borrow money against ... 
Mortgage Originator
An institution or individual that works with a borrower to complete ... 
Secondary Mortgage Market
The market where mortgage loans and servicing rights are bought ... 
Mortgage Pool
A group of mortgages held in trust as collateral for the issuance ...

How safe are money market accounts?
Learn the difference between a money market account and a money market fund. Both savings vehicles are relatively safe, but ... Read Answer >> 
Why is Belize considered a tax haven?
Explore the factors that make Belize one of the most modern and corporatefriendly tax havens in the world, including its ... Read Answer >> 
What is an assumable mortgage?
The purchase of a home is a very expensive undertaking and usually requires some form of financing to make the purchase possible. ... Read Answer >> 
Why would a homebuyer need to take out PMI (private mortgage insurance)?
Learn why some home buyers are required to take out private mortgage insurance (PMI), and how it affects the total monthly ... Read Answer >> 
Why does the majority of my mortgage payment start out as interest and gradually ...
When you make a mortgage payment, the amount paid is a combination of an interest charge and principal repayment. Over the ... Read Answer >> 
What are the disadvantages of a Roth IRA?
Get informed about Roth IRAs, which have a few disadvantages, including limited access to funds and contribution limits based ... Read Answer >>