How Do I Draw BTCUSD Trading Fib Extension Levels?
How Do I Trade Bitcoin and Draw Fibonacci Extension Levels?
Traders use Fibonacci extension levels to estimate where the bitcoin trend movement will reach. There are two commonly used Fibonacci extension levels - 61.8% Fibonacci Extension Level and 100% Fibonacci Extension Levels, these fibonacci extension levels are used for setting bitcoin take profit areas.
To draw Fibo Extension levels on the btcusd chart we wait until the bitcoin price retracement is complete & the bitcoin price starts to move in the original direction of the cryptocurrency trend. Where the bitcoin price retracement reaches is used as bitcoin chart point 3. Fibonacci Extension Technical Indicator is plotted using three bitcoin chart points as shown on the Fibonacci extension bitcoin example illustrated below of how to draw the Fibonacci Extension Technical Indicator.
The Fibonacci extension example illustrated below shows the 3 Cryptocurrency Chart Points where the Fibonacci extension bitcoin indicator is drawn, marked as Cryptocurrency Chart point 1, Cryptocurrency Chart point 2 & Cryptocurrency Chart point 3.
Cryptocurrency Chart point 1 is where the bitcoin trend started, Cryptocurrency Chart point 2 is where the bitcoin trend pulled back and retraced & Cryptocurrency Chart point 3 is where the bitcoin retracement reached as shown on the Fibonacci Extension Indicator example illustrated below.
How Do You Draw Fibonacci Extension Levels? - How Do I Draw Fibonacci Extension Levels?
Please note where these Fibonacci Extension areas are plotted - Fibo Extension levels are plotted above the Fibonacci bitcoin indicator, these are the btcusd chart points where a trader will set the bitcoin take profit orders using these Fib Extension Levels - 61.80% & 100.00% Fibo Extension Areas.
Drawing Fibo Extension Levels on an Upward BTCUSD Trend
We use Fibo expansion areas to estimate where the bitcoin trend movement will reach. There are two commonly used Fibonacci extension levels: 61.8% Bitcoin Fib Extension Level & 100% Fib Extension Level, these Fib Extension Levels are used for taking profit.
On the Fibonacci extension bitcoin indicator example illustrated below you can see that the Fibonacci extension bitcoin technical indicator is plotted along the direction of the bitcoin trend, since the bitcoin trend is upward - the Fibonacci extension levels bitcoin indicator is drawn upwards.
These Fibonacci extension levels are displayed as horizontal lines above the Fibonacci Extension indicator, showing bitcoin profit taking areas. In the bitcoin example illustrated below if you had used of 100.0% Fibonacci extension level you would have made nice profit from the trade set-up.
Drawing Fibonacci Extension Areas Indicator on an Upward Bitcoin Trend
From the above Fibonacci extension bitcoin indicator examples, the upwards bitcoin trend continued & both 61.80% & 100.0% Fibonacci extension levels were all hit after which bitcoin price retraced again after getting to the 100.0% Fibo Extension level.
Drawing Fib Extension Areas on a Downward BTCUSD Trend
Since we use the Fibonacci extension bitcoin indicator tool to estimate bitcoin take profit levels, how do we draw Fibonacci Extension in a downward Bitcoin trend?
We draw the Fibonacci extension bitcoin indicator tool from bitcoin chart point 1 to bitcoin chart point 2 to bitcoin chart point 3 as shown on the Fibonacci extension bitcoin example illustrated below. Remember we always plot this Fibonacci extension tool in direction of the cryptocurrency trend. In the Fibonacci extension example illustrated below, can you figure what's the direction which we have drawn it? That's right - downwards direction.
Try & identify the difference between how we have drawn Fibonacci extension levels bitcoin indicator above and how Fibonacci Extension levels bitcoin indicator is drawn below. This time you would also have used Fibonacci extension level 100.0%, just where the bitcoin price reached as displayed on the Fibonacci extension levels bitcoin example illustrated below. This would have been a good bitcoin take profit area.
Drawing Fibonacci Extension Areas Indicator on a Downward Bitcoin Trend
From the Fibonacci extension levels bitcoin indicator example above, after plotting this Fibonacci extension levels bitcoin tool there are two levels that are used to show the bitcoin profit taking areas - these two Fibonacci extension levels are drawn as horizontal lines across the bitcoin price chart marked as 61.80% Bitcoin Fib Extension Level & 100% Fib Extension Level.
How Do You Draw Bitcoin Fib Extension Levels?
