Analyze 61.8 Fibonacci Extension Level

We use Fibonacci extension levels to estimate where the indices trend stock indices price movement will reach. There are 2 important Fibonacci extension levels: 61.8% Fibonacci Extension Level and 100% Fibonacci Extension Level - these fibonacci extension levels are used for setting indices trading taking profit orders.

61.8 Fibonacci Extension Level

61.8 Fibonacci Extension Level is the most commonly used indices profit taking level when trading using the Fib Extension Technical Indicator.

To draw Fibonacci Extension levels on the stock indices chart we wait until the stock indices price retracement is complete and the stock indices price starts to move in original direction of the Indices trend. Where the stock indices price retracement reaches is used as chart point 3. Fibonacci Extension Indicator is plotted using three chart points as the example displayed below of how to plot the Fibonacci Extension Levels Indicator.

The Fibonacci extension example explained and illustrated below shows the 3 Stock Indices Chart Points where the Fibonacci extension indicator is drawn - marked as Stock Indices Chart point 1, Stock Indices Chart point 2 and Stock Indices Chart point 3.

Stock Indices Chart point 1 is where the indices trend started, Stock Indices Chart point 2 is where the stock indices price pulled back and retraced - Stock Indices Chart point 3 is where the stock indices price retracement reached as shown on the Fibonacci Extension Areas Indicator example shown below.

The First Fib Extension Level is the 61.8 Fibonacci Extension Level shown on the Fibonacci Extension indicator example Below Used to Set Take Profit Indices Orders

How to Analyze 61.8% Fibonacci Extension Level?

Please note where these Fibonacci Extension areas are drawn on the stock indices chart - Fib Extension zones are plotted above the Fibo Extension indicator - these are the stock chart points where a trader will place the indices take profit orders using these Fibonacci Extension Levels - 61.8% Fibonacci Extension Levels.

How to Analyze 61.8% Fibonacci Extension Level