How to Draw Fibonacci Extension CFDs Indicator Tool on CFDs Charts

How Do You Use Fibonacci Extension Levels on CFD Chart?

We use CFD Fibonacci Extension Levels to estimate where the trend movement will reach. There are Two important CFD Fibonacci Extension levels: 61.8% and 100% CFD Fibonacci Extension Areas, these are used for taking profit.

To draw CFD Fibonacci Extension levels on the cfds chart 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. CFD Fibonacci Extension Indicator is drawn using three chart points as illustrated on the cfd example explained below of how to draw the CFD Fibonacci Extension Technical Indicator Tool.

The CFD Fibonacci Extension examples explained below shows the Three Chart Points where the CFD Fibonacci Extension indicator is plotted, marked as Chart point 1, Chart point 2 and Chart point 3.

Chart point 1 is where the cfd trend started, Chart point 2 is where the cfd trend pulled back and retraced and Chart point 3 is where the cfd retracement reached as displayed on the CFD Fibonacci Extension Technical Indicator Tool example explained below.

How to Trade With CFD Fibonacci Extension - How to Draw Fibonacci Extension Levels on CFD Charts

Please note where these CFD Fib Extension levels are drawn - CFD Fib Extension zones are plotted above the Fibo technical indicator, these are the chart points where one will set the take profit orders using these CFD Fibonacci Extension Levels - 61.80% and 100.00% CFD Fibonacci Extension Levels.

Drawing CFDs Fib Extension Zones on an Upward CFDs Trend

We use CFD Fibonacci Extension Levels to estimate where the trend movement will reach. There are Two important CFD Fibonacci Extension levels: 61.80%CFD Fibonacci Extension Level & 100% CFD Fib Extension Level, these CFD Fib Extension Areas are used for taking profit.

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

These CFD Fibonacci Extension zones are shown as horizontal lines above the CFD Fibonacci Extension technical indicator, showing profit-taking areas. In the cfd example explained below if you had used the 100.00% CFD Fibonacci Extension level you would have made good profit from using this setup.

Drawing CFD Fibonacci Extension Indicator on an Upward CFD Trend - CFD Fibo Extension Tool

From the above CFD Fibonacci Extension indicator examples, the upwards trend continued and both 61.8% and 100.00% CFD Fibonacci Extension zones were all hit after which cfd price retraced again after getting to the 100.00% CFD Fibonacci Extension level.

Drawing Fib Extension Levels on a Downwards CFD Trend

Since we use the CFD Fibonacci Extension indicator tool to estimate take profit levels, how do we draw Fibonacci Extension in a downward CFD trend?

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

Try and spot the difference between how we have plotted CFD Fibonacci Extension indicator above & how CFD Fibonacci Extension technical indicator is drawn below. This time you would also have used CFD Fibonacci Extension level 100.0%, just where the price reached as illustrated on the cfd example explained and illustrated below. That would have been a good take profit area.

Drawing CFD Fibonacci Extension Indicator on a Downward CFD Trend - CFD Fibo Extension Tool

From the CFD Fibonacci Extension indicator example above, after drawing this CFD Fibonacci Extension tool there are 2 levels which are used to show the profit-taking areas, these 2 CFD Fibonacci Extension areas are drawn as horizontal lines across the cfd price chart marked as 61.8%CFD Fibonacci Extension Level & 100% CFD Fib Extension Level.