How to Draw Fibonacci IndicatorTool on a Down Trend Price Chart

How Do I Use Fibonacci Retracement Technical Indicator in Downward Trend?

Traders use Indices Fib retracement tool to determine where to place a sell trade in a downward trend.

How to Draw Fib Retracement on a Downward Trend

To Draw the Indices Fib retracement indicator the first thing to know is that this Fibo Retracement indicator is always drawn in direction of the trend.

If the trend is down ward - Fibonacci Retracement indicator tool is plotted downwards.

How to Draw Fib Retracement in a Downwards Trend

In the stock trading example explained below of how to plot the Indices Fib Retracement tool, the stock market trend is moving down between chart point 1 and chart point 2, & then after chart point two the stock trading price then retraces up to 38.2% Indices Fib retracement zone then it continues moving downward in the original downward trend. Note that this Fib retracement indicator is drawn from chart point 1 to chart point two in direction of the Trend (Downwards Direction).

How to Draw Fibonacci Retracement on a Downward Trend

Analysis of How to Draw Fib Retracement in a Down Trend

The above Indices Fibo Retracement technical analysis example stock trading setup is a Indices Fib Retracement setup where the stock trading price retraces immediately after getting to the 38.2% Chart Fibonacci Retracement Level.

In this Fibo Retracement technical analysis example the retracement of the stock trading price reached 38.2 % Indices Fib retracement level & did not get to 50.00% Indices Fib retracement zone. It's always good for stock traders to use the 38.2% Fibonacci retracement level because most times the stock trading price retracement doesn't always get to 50.0% Indices Fib retracement zone.

This 38.2% Indices Fib Retracement level provided a lot of resistance for stock price retracement, this was the best place for a trader to set a sell limit order as the stock market trend quickly moved down after retracing to this stock price retracement zone.

Tutorial Guide of How to Draw Fibonacci IndicatorTool on Charts

Tutorial Guide of How to Draw Fibonacci IndicatorTool on Charts