Trade Bitcoin Trading

How to Draw Fibonacci Extension

How Do I Use Fibonacci Extension Levels on Bitcoin Chart?

We use Fibo Expansion Levels to project where the btcusd crypto trend movement will get to and reach. There are Two crucial Fibo Extension areas: 61.80% & 100% Fib Expansion Areas, these are used for taking and booking profit.

To draw Fibo Expansion levels on the trading chart we wait until the bitcoin price retracement is complete & the bitcoin cryptocurrency price starts to move in the original and initial direction of the Crypto trend. Where the bitcoin price pull-back reaches and gets to is used as point 3. Fibo Extension Indicator is plotted using 3 chart points such as shown on the example illustrated below of how to draw the Fibo Extension IndicatorTool.

The Fibonacci Extension example shown below shows the three Chart Points where the Fibonacci Extension indicator is plotted, labeled as Point 1, Chart point two and Chart point 3.

Point 1 is where bitcoin crypto trend started, Point 2 is where bitcoin trend pulled back and retraced and Chart point 3 is where the price retracement reached such as shown & displayed on the Fibo Extension Indicator Tool illustration illustrated and shown below.

Fibonacci Extension Levels Strategy using Fibonacci Extension

How Do I Trade with Fibonacci Extension? - How to Draw Fibo Expansion Levels on Bitcoin Charts

Please note where these Fibo Expansion levels are plotted - Fibonacci Expansion levels are drawn above the Fibonacci indicator, these are the chart levels where a btc usd trader will set the takeprofit orders using these Fib Expansion Levels - 61.80% & 100.00% Fibonacci Expansion Areas.

Drawing Fibonacci Extension Levels on an Upward Bitcoin Trend

We use Fibo Extension Levels to project where the bitcoin cryptocurrency trend movement will get to and reach. There are Two crucial Fibo Extension areas: 61.80% BTCUSD Trading Fib Expansion Level and 100% Fib Expansion Level, these Fibonacci Expansion Areas are used for taking and booking profit.

On the Fibonacci Extension indicator example shown below you can see that the Fibo Extension technical tool is plotted along the direction of the btcusd crypto trend, since the bitcoin trend is upward - the Fibonacci Extension technical indicator is plotted upward.

These Fibonacci Expansion levels are shown as horizontal lines above the Fibonacci Extension technical indicator, showing the taking and booking profit zones. In the example shown below if you had used of 100.00% Fibonacci Extension level you would have made good profit from using this trade setup.

Drawing Fibonacci Expansion Indicator on an Upwards Bitcoin Trend

Drawing Fibonacci Extension Indicator in an Upwards Bitcoin Trend - Fibonacci Extension Tool

From the above Fibo Expansion technical indicator illustration, the upwards bitcoin trend continued & both 61.80% & 100.0% Fibo Extension levels were all hit after which bitcoin price retraced again after getting to the 100.0% Fibonacci Extension level.

Drawing Fibo Extension Areas on a Downward Bitcoin Trend

Since we use the Fibonacci Extension indicator to estimate/gauge take-profit levels, how do we draw Fibo Extension in a downwards trend?

We draw the Fibo Extension tool from point 1 to chart point 2 to point three like illustrated on the example shown below. Remember we always draw this Fib Expansion tool in direction of the market price trend. In the Fibonacci Expansion example shown below, can you figure what is the direction which we've drawn it? That is right - downward direction.

Try & identify the difference between how we have plotted Fibo Extension indicator above and how Fibo Extension technical indicator is plotted below. This time you'd also have used Fibo Extension level 100.00%, just where the bitcoin price reached such as illustrated and shown on the illustration illustrated and shown below. That would have been a nice take profit order level.

How Do I Draw Fibonacci Extension Bitcoin Tool on Bitcoin Charts?

Drawing Fibonacci Extension Indicator on a Down-ward Bitcoin Trend - Fibo Extension Tool

From the Fibonacci Extension indicator exemplification set-out above, after drawing this Fibo Expansion tool there are 2 levels which are used to show and illustrate the taking and booking profit zones, these 2 Fibonacci Expansion levels are plotted as horizontal lines across the bitcoin crypto price chart marked and labeled as 61.80% BTCUSD Fibonacci Expansion Level & 100% Fibonacci Expansion Level.

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