What the calculator does and does not do
You enter a primary swing: a start price and an end price. If the end is above the start the swing is treated as rising, otherwise as falling. The calculator then lists Fibonacci retracement and extension levels for that swing. You can tick Include validation swing and enter a second swing, and the calculator compares the levels from both. A summary strip shows the directional bias of the primary swing, its range, the number of confluence zones found and the tolerance used.
The calculator does not identify Elliott waves. Wave counting is a subjective interpretation of a chart, and you decide which two prices are the anchors. What the calculator removes is the arithmetic, and what it adds is the clustering of levels that land close together.
How the levels are calculated
Retracements use 23.6%, 38.2%, 50%, 61.8% and 78.6% of the swing range, measured back from the end of the swing. Extensions use 100%, 127.2%, 161.8%, 200% and 261.8% of the range, measured from the start of the swing in the direction of the move. For a rising swing the retracements fall below the end price and the extensions rise above the start; a falling swing is the mirror image.
| Type | Ratio | Price |
|---|---|---|
| Retracement | 23.6% | 1,152.80 |
| Retracement | 38.2% | 1,123.60 |
| Retracement | 50.0% | 1,100.00 |
| Retracement | 61.8% | 1,076.40 |
| Retracement | 78.6% | 1,042.80 |
| Extension | 100.0% | 1,200.00 |
| Extension | 127.2% | 1,254.40 |
| Extension | 161.8% | 1,323.60 |
| Extension | 200.0% | 1,400.00 |
| Extension | 261.8% | 1,523.60 |
How clusters are formed
All levels from the primary swing, and from the validation swing if it is enabled, are sorted by price and grouped. A level joins a group if it is within a tolerance of the group's running average price. The tolerance is the largest of 1.8% of the primary swing range, 0.09% of the primary end price and 0.25 price units. Only groups with two or more levels are shown as confluence zones.
Each zone shows its centre (the average of its levels), its price band, the number of overlapping levels and which levels contributed. Zones are ranked by that count. The count describes how many levels agree; it is not a probability that price will reverse there.
With a single swing, retracements and extensions rarely land within tolerance of each other, so the calculator often shows no zones. Confluence normally comes from adding a second swing.
Worked example: two swings
Use the primary swing 1,000 to 1,200 and a validation swing from 1,050 to 1,150. The tolerance is the larger of 1.8% of the 200-point range (3.6) and 0.09% of 1,200 (1.08), so 3.6. The calculator finds three zones, each built from one level of each swing. These numbers are illustrative.
| Zone centre | Price band | Overlapping levels |
|---|---|---|
| 1,100.00 | 1,100.00 to 1,100.00 | Primary 50.0% retracement and validation 50.0% retracement |
| 1,125.00 | 1,123.60 to 1,126.40 | Primary 38.2% retracement and validation 23.6% retracement |
| 1,151.40 | 1,150.00 to 1,152.80 | Validation 100% extension and primary 23.6% retracement |
Each zone has two overlapping levels, so they rank equally and are ordered by price. If you widen the validation swing the ranking changes, which shows how sensitive confluence is to the anchors you choose.
Using it well
- Pick the primary swing on a chart you have already analysed, using clear swing highs and lows rather than arbitrary prices.
- Enter the start and end prices in the order the swing happened, so the direction is correct.
- Add a validation swing from a different degree or timeframe if you want confluence zones.
- Calculate, then compare the zones with prior highs and lows, pivot levels and volume on the chart.
- Wait for price to show a reaction in a zone before acting, and set your risk away from the zone rather than at it.
Limits
Fibonacci levels are a technique, not a law. The more anchors you try, the more overlaps you will find, so zones built from many freely chosen swings are weak evidence. Fibonacci ratios also vary between traders and software, so the levels here may differ slightly from another tool. Combine zones with structure and volume, for example in the Fibonacci retracement guide and the Fibonacci screener workflow.