How to Draw Fib Expansion Technical Indicator on Upwards Trend
How Do You Draw Fib Expansion for Indices Uptrend?
We use Fibonacci Expansion zones to estimate where the market trend move will get to. There are two oftenly used Fib Expansion zones: 61.8% Indices Trading Fib Expansion Level and 100 % Fib Expansion Level, these Fibonacci Expansions are used for setting take profit order levels.
On the Fibonacci Expansion indicator example explained and illustrated below you can see that the Fibonacci Expansion indicator is plotted along the direction of the trend, since the trend is up - the Fibonacci Expansion indicator tool is drawn upward.
These Fib Expansion levels are shown as horizontal lines above the Fib Expansion technical indicator, showing profit taking areas. In the example illustrated below if you had used the 100.00% Fibonacci Expansion zone you would have made good profit from this setup.
How Do I Draw Fibonacci Expansion on Up Indices Trend
From the above Fibonacci Expansion technical indicator tool example, the upward trend continued and both 61.8% and 100.00% Fibonacci Expansion zones were all hit after which the price retraced again after getting to the 100.0% Fib Expansion zone.
From the Fibonacci Expansion technical indicator tool example above, after plotting this Fibonacci Expansion tool there are two levels that are used to show the profit taking areas, these two Fibonacci Expansion zones are plotted as horizontal lines across the chart marked as 61.8 % Indices Trading Fib Expansion Level & 100 % Fib Expansion Level.
Explanation of How to Draw Fib Expansions on Stock Indices Charts
We use Fibonacci Expansion zones to estimate where the trend move will get to. There are two important Fib Expansion levels: 61.8% & 100% Fibonacci Expansions, these are used for taking profit.
To draw Fib Expansion zones on the chart we wait until the price retracement is complete & price starts to move in original direction of the Indices trend. Where the price retracement reaches is used as chart point 3. Fibonacci Expansion Technical Indicator is plotted using three chart points as displayed on the example explained below of how to plot the Fib Expansion IndicatorTool.
The Fib Expansion examples illustrated below shows the Three Chart Points where the Fib Expansion indicator tool is drawn, labeled as Chart point 1, Chart point two and Chart point 3.
Point 1 is where the market trend started, Point 2 is where the market trend pulled back and retraced and Chart point 3 is where the retracement reached as displayed on the Fib Expansion Technical Indicator Tool example explained below.
How Do I Draw Fibonacci Expansion Technical Indicator on Upwards Trend
Please take note where these Fib Expansion levels are drawn - Fib Expansion levels are drawn above the Fib indicator, these are the chart points where a trader will place takeprofit orders using these Fibonacci Expansions - 61.8% and 100.00% Fib Expansion Levels.
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