How Do You Interpret Fibonacci Expansion Levels in CFD?

How Do You Trade Fibonacci Expansion Levels in CFD?

Fibonacci expansion indicator is drawn using 3 chart points.

To draw CFD Fibonacci Expansion levels on cfds charts we wait until the cfd price retracement is complete & the price starts to move in original direction of the CFD trend. Where the cfd price retracement reaches is used as chart point 3.

The Fibonacci expansion cfd example explained and illustrated below shows the 3 CFDs Chart Points where the Fibonacci expansion 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 Expansion CFD Tool cfd examples explained and illustrated below.

CFD Fibonacci Expansion Strategy using CFD Fibonacci Expansion Levels

Please note where these CFD Fibonacci Expansion zones are drawn on the cfds chart - CFD Fibonacci Expansion zones are plotted above the Fibonacci CFDs Indicator, these are points where the trader will set the cfd take profit orders using these CFD Fibo Expansion Levels - 61.8% & 100% CFD Fibo Expansion Areas.

Drawing Fibonacci Expansion Levels on an Upward CFD Trading Trend

We use Fibonacci expansion areas to estimate where the market trend movement will get to. There are 2 important Fibo expansion levels: 61.8% and 100% CFD Fibonacci Expansion Levels, these CFD Fibonacci Expansion Levels are used for taking cfd trading profit.

On the Fibonacci expansion cfd example explained and illustrated below you can see that the Fibonacci expansion technical indicator is drawn along the direction of the trend, since the trend is upwards - the Fibonacci expansion indicator is drawn upwards.

These Fibo expansion levels are displayed as horizontal lines above the CFD Fibo Expansion indicator, showing the profit taking areas. In the cfd example explained and illustrated below if you had used of 100% Fibonacci expansion level you would have made nice cfd trading profit from the cfd trade setup.

Drawing Fib Expansion Levels on an Upward CFD Trend - CFD Fibonacci Expansion Strategies in CFD

From the above Fibonacci expansion cfd examples, the upward trend continued & both 61.80% and 100.0% Fibonacci expansion levels were all hit after which cfd price retraced again after getting to the 100.0 % CFD Fibonacci Expansion level.

Drawing CFDs Fib Expansion Levels on a Downward CFDs Trading Trend

Since we use this Fibo expansion cfd tool to estimate cfd trading take profit levels, how do we draw it in a downwards CFD trend?

We draw the Fibonacci expansion indicator from chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibonacci expansion cfd tool in the direction of the trend. In the Fibonacci expansion cfd example explained and illustrated below, can you figure what direction we have drawn it? That is right - downwards direction.

Try & spot the difference between how we have drawn cfd Fibonacci expansion levels above and how Fibonacci Expansion indicator is drawn below. This time you would also have used Fibonacci expansion 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 Expansion Levels on a Downward CFD Trend - CFD Fibonacci Expansion Strategies in CFD

From the Fibonacci expansion cfd example above, after drawing this Fibonacci expansion tool there are two levels that are used to show the cfd profit taking areas, these two Fibonacci expansion levels on the cfd indicator are drawn as horizontal lines across the cfd price chart.

Read Fibonacci Expansion Levels in CFD?