How to Draw Fibonacci Expansion Indicator Tool on Upwards Indices Trend
How Do I Draw Fibonacci Expansion for Indices Uptrend?
We use Fibonacci Expansion levels to estimate where the indices trend movement will reach. There are 2 commonly used Fibonacci Expansion levels; 61.8% Fibonacci Expansion Level and 100% Fibonacci Expansion Level, these Fibonacci Expansion Levels are used for setting take profit levels.
On the Fibonacci Expansion indicator example explained and illustrated below you can see that the Fibonacci Expansion indicator tool is drawn along the direction of the indices trend, since the indices trend is up - the Fibonacci Expansion indicator is drawn upwards.
These Fibonacci Expansion levels are displayed as horizontal lines above the Fibonacci Expansion indicator, showing profit taking areas. In the stock indices trading example explained and illustrated below if you had used of 100.0% Fibonacci Expansion level you would have made nice profit from the trade setup.
How to Draw Fibonacci Expansion on Up Indices Trend
From the above Fibonacci Expansion indicator tool example, the upward indices trend continued and both 61.8% and 100.0% Fibonacci Expansion levels were all hit after which the stock indices price retraced again after getting to the 100.0% Fibonacci Expansion level.
From the Fibonacci Expansion indicator tool example above, after drawing this Fibonacci Expansion tool there are two levels that are used to show the profit taking areas, these two Fibonacci Expansion levels are drawn as horizontal lines across the stock indices chart marked as 61.8% Fibonacci Expansion Level and 100% Fibonacci Expansion Level.
Explanation of How to Draw Fibonacci Expansion Levels on Stock Indices Charts
We use Fibonacci Expansion levels to estimate where the indices trend movement will reach. There are 2 important Fibonacci Expansion levels; 61.8% and 100% Fibonacci Expansion Levels, these are used for taking profit.
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 the original direction of the Indices trend. Where the stock indices price retracement reaches is used as chart point 3. Fibonacci Expansion Indicator is drawn using three chart points as shown on the stock indices trading example explained and illustrated below of how to draw the Fibonacci Expansion Indicator Tool.
The Fibonacci Expansion example explained and illustrated below shows the 3 Chart Points where the Fibonacci Expansion indicator is drawn, marked as Chart point 1, Chart point 2 and Chart point 3.
Chart point 1 is where the indices trend started, Chart point 2 is where the indices trend pulled back and retraced and Chart point 3 is where the stock indices retracement reached as shown on the Fibonacci Expansion Indicator Tool example explained and illustrated below.
How to Draw Fibonacci Expansion Indicator Tool on Upwards Indices Trend
Please note where these Fibonacci Expansion levels are drawn - Fibonacci Expansion levels are drawn above the Fibonacci indicator, these are the chart points where a indices trader will set the take profit orders using these Fibonacci Expansion Levels - 61.8% and 100.0% Fibonacci Expansion Levels.