How Do You Interpret CFD Fibo Projection Zones on CFD Charts?
How Do You Trade Fibonacci Projection Zones on CFD Charts?
Fibonacci projection indicator is drawn using 3 chart points.
To draw Fib Projection levels we wait until the cfd price retracement is complete & the price starts to move in original direction of the trend. Where the cfd price retracement reaches is used as chart point 3.
The Fibonacci projection cfd example explained and illustrated below shows the 3 CFDs Chart Points where the Fibonacci projection indicator is drawn, marked as CFDs Chart point 1, 2 and 3. CFDs Chart point 1 is where the cfd trend started, CFDs Chart point 2 is where the cfd trend pulled back & retraced & CFDs Chart point 3 is where the price retracement reached as illustrated on the Fibonacci Projection CFD Tool cfd examples explained and illustrated below.
How Do You Analyze CFD Fibo Projection Zones on CFD Charts?
Please note where these Fibonacci Projection levels are plotted - Fibo Projection zones are plotted above the Fibo CFDs Indicator, these are points where the trader will set the cfd trading take profit orders using these Fib Projection Levels - 61.80% and 100% Fibonacci Projection Levels.
Drawing Fibonacci Projection Zones on an Upwards CFD Trading Trend
We use Fibo projection levels to estimate where the trend movement will reach. There are 2 important Fibonacci projection levels: 61.8% and 100% Fibonacci Projection Levels, these Fibonacci Projection Levels are used for setting cfd trading take profit areas.
On the Fibonacci projection cfd example explained and illustrated below you can see that the Fibonacci projection technical indicator is drawn along the direction of the trend, since the trend is upwards - the Fibo projection is drawn upwards.
These Fib projection levels are displayed as horizontal lines above the Fibonacci Projection technical indicator, showing profit taking areas. In the cfd example explained and illustrated below if you had used of 100% Fibonacci projection you would have made nice cfd profit from the cfd trade setup.
Drawing Fib Projection Zones on an Upwards CFD Trend - Fibonacci Projection Strategies in CFD
From the above Fibonacci projection cfd examples, the upward trend continued & both 61.80% and 100.0% Fibonacci projection levels were all hit after which cfd price retraced again after getting to the 100.0% Fibonacci Projection level.
Drawing Fibonacci Projection Levels on a Downwards CFD Trading Trend
Since we use this Fibo projection tool to estimate cfd trading take profit levels, how do we draw it in a downwards CFD trend?
We draw the Fibonacci projection indicator from chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibonacci projection tool in the direction of the trend. In the Fibonacci projection cfd example explained and illustrated below, can you figure what direction we have drawn it? - downwards direction.
Try & spot the difference between how we have drawn Fibonacci projection above and how Fibonacci Projection is drawn below. This time you would also have used Fibonacci projection level 100%, just where the price reached as shown on the cfd example explained and illustrated below. That would have been a nice cfd take profit area.
Drawing Fib Projection Levels on a Downward CFD Trend - Fibonacci Projection Strategies in CFD
From the Fibonacci projection cfd example above, after drawing this Fibonacci projection cfd tool there are two levels that are used to show the cfd trading profit taking areas, these 2 Fibonacci projection cfd trading levels are drawn as horizontal lines across the cfd chart.
How Do I Interpret CFD Fibo Projection Zones on CFD Charts?
