How to Draw Fibonacci Expansion Levels on Downward Indices Trend

How Do I Trade Indices and Draw Fibonacci Expansion Levels on Downward Indices Trend?

We draw the Fibonacci Expansion Indicator tool from chart point 1 to chart point 2 to chart point 3 as shown on the Fibonacci expansion stock indices trading examples explained below. Remember we always plot this Fibonacci Expansion tool in direction of the stock indices trend. In the Fibonacci Expansion example explained and illustrated below, can you figure what's the direction which we have plotted it? That's right - downward direction.

As a trader you would also have used Fibonacci Expansion level 100.0%, just where the stock indices price reached as illustrated on the Fibonacci Expansion example explained and illustrated below. That would have been a good indices take profit area.

How to Draw Fib Expansion Levels on Downward Indices Trend?

From the Fibonacci Expansion Indicator tool example above, after plotting this Fibonacci Expansion Indicator tool there are 2 levels that are used to show the indices profit taking levels - these two Fibonacci Expansion levels are represented as horizontal lines across the stock indices chart marked as 61.8% Stock Indices Fibonacci Expansion Level and 100% Fibonacci Expansion Level.

Interpretation of How Do I Draw Fibonacci Expansion Levels on Stock Indices Charts?

Indices traders Fibonacci Expansion levels to estimate where the stock indices price movement will reach. There are 2 commonly used Fibonacci Expansion areas: 61.8% Fibonacci Expansion Level and 100% Fibonacci Expansion Levels - these fibonacci expansion levels are used for setting indices taking profit levels.

To draw Fibonacci Expansion 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 Expansion Indices Indicator tool is drawn using three chart points as illustrated on the Fib expansion stock indices example explained below of how to plot the Fib Expansion Technical Indicator Tool.

The Fibonacci Expansion example explained and illustrated below shows the 3 Stock Indices Chart Points where the Fib Expansion 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 & retraced & Stock Indices Chart point 3 is where the indices retracement reached as shown on the Fib Expansion Indicator Tool example explained below.

How Do You Trade Indices and Draw Fibonacci Expansion Levels on Downward Indices Trend?

Please note where these Fibonacci Expansion zones are plotted - Fibo Expansion zones are drawn above the Fibonacci stock indices indicator, these are the stock chart points where a trader will place the indices take-profit orders using these Fibonacci Expansion Levels - 61.8% Fibonacci Expansion Level and 100.0% Fibo Expansion Level.

How to Draw Fib Expansion Levels on Downward Indices Trend