How to Use Fibonacci Extension Levels

We use Fibonacci Extension Levels to estimate where the indices trend movement will reach. There are 2 important Fibonacci Extension levels; 61.8% and 100% Fibonacci Extension Levels, these are used for taking profit.

To draw Fibonacci Extension levels on the MT4 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 Extension MT4 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 Extension Indicator MT4 Tool.

The Fibonacci Extension MetaTrader 4 Indices Indicator example explained and illustrated below shows the 3 Chart Points where the Fibonacci Extension MetaTrader 4 stock indices 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 Extension MetaTrader 4 Stock Indices Indicator Tool example explained and illustrated below.

How to Use Fibonacci Extension Levels - Fibonacci Extension PDF

How to Use Fibonacci Extension Levels - Fibonacci Extension PDF

Please note where these Fibonacci Extension levels are drawn - Fibonacci Extension levels are drawn above the MetaTrader 4 Fibonacci indicator, these are the chart points where a indices trader will set the take profit orders using these Fibonacci Extension Levels - 61.8% and 100.0% Fibonacci Extension Levels.

Upward Indices Trend - How to Use Fibonacci Extension in Indices Trading - How to Use Fibonacci Extension Levels - Fibonacci Extension PDF

We use Fibonacci Extension Levels to estimate where the indices trend movement will reach. There are 2 important Fibonacci Extension levels; 61.8% Fibonacci Extension Level and 100% Fibonacci Extension Level, these Fibonacci Extension Levels are used for taking profit.

On the Fibonacci Extension MetaTrader 4 stock indices indicator example explained and illustrated below you can see that the Fibonacci Extension MetaTrader 4 stock indices indicator tool is drawn along the direction of the indices trend, since the indices trend is upwards - the MetaTrader 4 Fibonacci Extension indicator is drawn upwards.

These Fibonacci Extension levels are displayed as horizontal lines above the Fibonacci Extension MetaTrader 4 indices indicator, showing profit taking areas. In the stock indices trading example explained and illustrated below if you had used of 100.0% Fibonacci Extension level you would have made good profit from the trade setup.

How to Use Fibonacci Extension Levels - Fibonacci Extension PDF

How to Use Fibonacci Extension in Indices Trading - How to Use Fibonacci Extension Levels

From the above Fibonacci Extension MetaTrader 4 stock indices indicator example, the upward indices trend continued and both 61.8% and 100.0% Fibonacci Extension levels were all hit after which stock indices price retraced again after getting to the 100.0 % Fibonacci Extension level.

How to Use Fibonacci Extension Levels

Since we use the Fibonacci Extension MetaTrader 4 stock indices indicator tool to estimate take profit levels, how do we draw MetaTrader 4 Fibonacci Extension in a downward Indices trend?

We draw the Fibonacci Extension MetaTrader 4 stock indices indicator tool from chart point 1 to chart point 2 to chart point 3 as shown on the stock indices trading example explained and illustrated below. Remember we always draw this Fibonacci Extension MetaTrader 4 stock indices indicator tool in the direction of the indices trend. In the Fibonacci Extension example explained and illustrated below, can you figure what direction we have drawn it? That is right - downward direction.

Try and spot the difference between how we have drawn Fibonacci Extension indicator above and how Fibonacci Extension indicator is drawn below. This time you would also have used Fibonacci Extension level 100.0%, just where the stock indices price reached as shown on the stock indices trading example explained and illustrated below. That would have been a good take profit level.

How to Use Fibonacci Extension Levels - Fibonacci Extension PDF

How to Use Fibonacci Extension in Indices Trading - How to Use Fibonacci Extension Levels

From the Fibonacci Extension MetaTrader 4 stock indices indicator example above, after drawing this MetaTrader 4 Fibonacci Extension tool there are two levels that are used to show the profit taking areas, these two Fibonacci Extension levels are drawn as horizontal lines across the stock indices price chart marked as 61.8% Fibonacci Extension Level and 100% Fibonacci Extension Level.