Upward Indices Trend Retracement Indicator Indices Trading Strategy

How Do I Draw Fibonacci Retracement for Indices Uptrend?

The Fibonacci retracement indicator is placed on a stock indices chart in an upward indices trending market and this Fibonacci Retracement indicator then calculates the retracement levels for the upward indices trend on the stock indices charts. Fibonacci retracement levels stock indices indicator is used by many indices traders as a indices trading retracement trading indicator.

In the Indices Retracement Strategy example explained and illustrated below the stock indices price is moving up between chart point 1 and chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then stock indices price continues moving up in the original upward indices trend. Note that this Fibonacci retracement indicator is drawn from point 1 to point 2 in the direction of the indices trend (Upward Direction).

Because we know this is just a retracement based on our chart indices trend - using this Fibonacci retracement indicator, we put a buy order just between the levels 38.2% and 50.0% retracement levels and our stop loss just below 61.8% retracement level. If you had put a buy at this point in the trade example explained and illustrated below you would have made a lot of pips after the stock indices price retracement reached the Fibonacci 50.0% level and then continued moving in the original upward indices trend.

How to Trade Indices Price Retracement on Upward Indices Trend - Fibonacci Retracement Levels Trading

Explanation for the Above Fibonacci Retracement Strategy Example

Once the stock indices price hit the 50.0% Fibonacci retracement level, this retracement level provided a lot of support for the indices price, and afterwards the stock indices trading market then resumed the original upward indices trend and continued to move up.

23.6% Fibonacci retracement level provides minimum support and is not an ideal place to place a stock indices order.

38.2% Fibonacci retracement level provides some support but stock indices price in this example continued to retrace up to the 50% zone.

50.0% Fibonacci retracement level provides a lot of support and in this example, this was the ideal place to place a buy stock indices order.

For this Indices Retracement Strategy example, the stock indices price retracement reached the 50.0% Fibonacci retracement level, but most of the time the stock indices trading market will retrace up to 38.2% Fibonacci retracement level and therefore most of the time indices traders set their buy limit indices orders at the 38.2% Fibonacci retracement level, while at the same time placing a stop just below 61.8% Fibonacci retracement level.