How to Draw Bitcoin Fibonacci Expansion
How Do I Use Fibonacci Extension Levels on Bitcoin Chart?
We use Fibo Extension areas to try to estimate where btcusd crypto trend movement will get to and reach. There are Two crucial Fibo Expansion areas: 61.80 % & 100% Fibo Extension Areas, these are used for taking profit.
To draw Fibo Expansion levels on the chart we wait til the btcusd crypto price retracement is complete & the bitcoin price starts to move in the original and initial direction of the Bitcoin trend. Where the bitcoin crypto price pull back reaches and gets to is used as point 3. Fibonacci Expansion Indicator is plotted using 3 chart points such as shown on the illustration illustrated below of how to draw the Fibonacci Expansion IndicatorTool.
The Fib Expansion example shown below illustrates the 3 Points where the Fibonacci Expansion indicator is plotted, labeled as Point 1, Chart point two and Chart point 3.
Point 1 is where btcusd crypto trend started, Point 2 is where btcusd crypto trend pulled back and retraced and Chart point 3 is where the price retracement reached like is shown & displayed on the Fibonacci Expansion Indicator Tool illustration shown below.
How Do I Trade with Fib Expansion? - How to Draw Fibo Expansion Levels on Bitcoin Charts
Please note where these Fibo Extension levels are drawn - Fib Expansion levels are drawn above the Fib indicator, these are the chart levels where a bitcoin trader will set the takeprofit orders using these Fibonacci Extension Levels - 61.80% & 100.00% Fibo Extension Areas.
Drawing Fib Expansions on an Upwards BTCUSD Trend
We use Fib Expansion areas to try to estimate where bitcoin cryptocurrency trend movement will get to and reach. There are Two crucial Fibonacci Expansion areas: 61.8% Bitcoin Fibo Expansion Level and 100% Fib Expansion Level, these Fibo Extension Levels are used for taking profit.
On the Fibo Expansion indicator example illustrated below you can see that the Fibonacci Expansion tool is plotted along the direction of the btcusd crypto trend, since the bitcoin trend is upward - the Fibonacci Expansion indicator is drawn upward.
These Fibo Expansion levels are shown as horizontal lines above the Fibonacci Expansion indicator, showing profit booking zones. In the example shown below if you had used of 100.00% Fibo Expansion level you would have made a good profit from the trade set-up.
Drawing Fib Expansion Indicator in an Upwards Bitcoin Trend - Fibonacci Expansion Tool
From the above Fib Expansion indicator example, the upward bitcoin trend continued & both 61.80% & 100.0% Fibo Expansion areas were all hit after which bitcoin price retraced again after getting to the 100.00% Fibonacci Expansion level.
Drawing Fib Expansion Areas on a Downward BTCUSD Trend
Since we use the Fibo Expansion indicator to estimate/gauge take-profit levels, how do we draw Fibo Expansion in a downward trend?
We draw the Fibonacci Expansion tool from chart point 1 to point 2 to chart point three such as illustrated on the example shown below. Remember we always draw this Fib Expansion tool in direction of the trend. In the Fib Expansion exemplification illustrated below, can you figure out what is the direction which we have drawn it? That's right - downward direction.
Try and identify the difference between how we have plotted Fibonacci Expansion indicator above and how Fibonacci Expansion indicator is drawn below. This time you'd also have used Fibo Expansion level 100.0 %, just where the btcusd crypto currency price reached such as illustrated and shown on the illustration illustrated and shown below. That would have been a nice take profit order level.
Drawing Fib Expansion Indicator on a Downwards Bitcoin Trend - Fibonacci Expansion Tool
From the Fibonacci Expansion indicator exemplification above, after drawing this Fibonacci Expansion tool there are 2 levels that are used to show and illustrate the taking profit zones, these 2 Fibo Expansion levels are plotted as horizontal lines across the bitcoin price chart marked and labeled as 61.80% BTCUSD Fibonacci Extension Level and 100% Fibonacci Extension Level.
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