Draw Fibonacci Projection Levels
How Do You Trade and Draw Fibonacci Projection Levels?
Traders use Fibonacci projection levels to estimate where the trend movement will reach. There are two commonly used Fibonacci projection levels - 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these fibonacci projection levels are used for setting cfd trading take profit areas.
To plot Fibonacci Projection zones on the cfd chart 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. Fibonacci Projection CFD Indicator is drawn using three chart points as shown on the Fibo projection cfds trading example explained below of how to draw the Fibonacci Projection CFDs Indicator Tool.
The Fibonacci projection example explained and illustrated below shows the 3 CFD Trading Chart Points where the Fibonacci projection indicator is drawn, marked as CFD Trading Chart point 1, CFD Trading Chart point 2 & CFD Trading Chart point 3.
CFD Trading Chart point 1 is where the cfd trend started, CFD Chart point 2 is where the cfd trend pulled back & retraced & CFD Trading Chart point 3 is where the cfd retracement reached as illustrated on the Fibonacci Projection CFDs Indicator Tool example explained below.
CFD Draw Fibo Projection Levels - Draw Fibonacci Projection Levels?
Please note where these Fibonacci Projection levels are plotted - Fibo Projection zones are plotted above the Fibo cfd technical indicator, these are the chart points where one will set the cfd trading take profit orders using these Fibo Projection Levels - 61.80% & 100.0% Fib Projection Zones.
Drawing Fibonacci Projection Zones on an Upwards CFDs Trading Trend
We use Fibonacci expansion areas to estimate where the market trend movement will get to. There are two commonly used Fibonacci projection levels: 61.8%Fibonacci Projection Level and 100% Fibonacci Projection Level, these Fibonacci Projection Levels are used for taking profit.
On the Fibonacci projection indicator 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 Fibonacci projection levels indicator is drawn upwards.
These Fibonacci projection levels are displayed as horizontal lines above the Fibonacci Projection indicator, showing cfd profit taking areas. In the cfds trading examples explained below if you had used the 100.00% Fibo projection level the you would have made good profit from this trade set-up.
Drawing Fibonacci Projection Zones Trading CFD Indicator on an Upward CFD Trading Trend
From the above Fibonacci projection indicator examples, the upwards trend continued & both 61.80% and 100.0% Fibonacci projection levels were all hit after which cfd price retraced again after getting to the 100.00% Fibonacci Projection level.
Drawing Fibonacci Projection Levels on a Downwards CFDs Trading Trend
Since we use the Fibonacci projection indicator tool to estimate cfd trading take profit levels, how do we draw Fibonacci Projection in a downward CFD trend?
We draw the Fibonacci projection indicator tool from chart point 1 to chart point 2 to chart point 3 as illustrated on the Fibonacci projection cfds trading example explained below. Remember we always plot this Fibo projection tool in the direction of the trend. In the Fibonacci projection example explained and illustrated below, can you figure what is direction that we have drawn it? That is right - downward direction.
Try & spot the difference between how we have drawn Fibonacci projection levels indicator above and how Fibonacci Projection levels indicator is drawn below. This time you would also have used Fibonacci projection level 100.0%, just where the price reached as shown on the Fibonacci projection levels cfds trading example explained and illustrated below. This would have been a good cfd take profit area.
Drawing Fibonacci Projection Zones Trading CFD Indicator on a Downward CFD Trading Trend
From the Fibonacci projection levels indicator example above, after drawing this Fibonacci projection levels cfd tool there are 2 levels that are used to show the cfd trading profit taking areas - these two Fibonacci projection levels are drawn as horizontal lines across the cfd price chart marked as 61.80% CFD Fibonacci Projection Level and 100% Fibo Projection Level.
Draw Fibonacci Projection Areas
