What's the Difference between Crypto Fibo Retracement and Fibonacci Extension?
How to use Fibonacci Retracement & Extension and the Difference between Fib Retracement and Extension
BTCUSD Fibonacci Retracement Areas
Fib retracement is drawn between 2 chart points but Fib extension is drawn using 3 points.
Fib Retracement Level example illustrated below where the bitcoin trend is moving downward between Chart point 1 & Chart point 2, then after the Point 2 the bitcoin cryptocurrency price retraces then it continues moving upwards in the original upward trend. Note that this Fibonacci Retracement Levels indicator is drawn from Chart point 1 to point 2 in direction of the market trend.
Fibo Retracement Levels - How to Draw Fib Retracement Levels
Fibonacci Expansion Levels
Fib retracement is drawn between 2 chart points but Fib expansion is drawn using 3 chart points.
To draw these Fibonacci Extension levels we wait til the bitcoin price retracement is complete & the bitcoin price starts and begins to move in the original direction of the Bitcoin trend. Where the retracement gets to is used as chart point 3 for Fib extension.
The Fibonacci Expansion exemplification illustrated below shows the 3 chart Points where the Fibonacci Expansion indicator is drawn, labeled as chart point 1, 2 & 3. Point 1 is where the bitcoin trend started, Point 2 is where the bitcoin crypto trend pulled back & retraced & Chart point 3 is where the price retracement reached such as shown & displayed on Fibo Extension example illustrated below.
Fibo Expansion Levels - How to Draw Fibo Expansion Levels
Please note where these Fibonacci Expansion levels are plotted - Fib Expansion levels are drawn above the Fibo Extension indicator, these are the points where a bitcoin trader will set the take profit orders.
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