How to Draw Fibonacci Extension CFDs Indicator Tool on Downwards CFD Trend
How Do You Draw CFD Fibonacci Extension for CFD Downtrend?
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 illustrated below. Remember we always plot 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 - downward direction.
As a trader you would also have used CFD Fibonacci Extension level 100.00%, just where the price reached as illustrated on the CFD Fibonacci Extension example explained and illustrated below. That would have been a good take profit area.
How to Draw CFD Fib Extension on Downward CFD Trend - How to Draw Fibonacci Extension on Down CFD Trend
From the CFD Fibo Extension indicator tool examples above, after drawing this CFD Fibonacci Extension indicator tool there are two levels that are used to show the profit taking levels, these two CFD Fibo Extension levels are plotted as horizontal lines across the cfds chart marked as 61.8%CFD Fibonacci Extension Level & 100% CFD Fib Extension Level.
Explanation of How to Draw CFDs Fib Extension Levels on CFDs Charts
We use CFD Fibonacci Extension Zones to estimate where the trend movement will reach. There are 2 oftenly used CFD Fibonacci Extension areas: 61.80% CFD Fibonacci Extension Level and 100% CFD Fibonacci Extension Levels, these are used for setting taking profit levels.
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 tool is drawn using three chart points as shown on the cfd example explained below of how to draw the CFD Fibonacci Extension Technical Indicator Tool.
The CFD Fibonacci Extension example explained below shows the 3 Chart Points where the CFD Fibonacci Extension indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the cfd trend started, Chart point 2 is where the cfd trend pulled back & retraced and Chart point 3 is where the cfd retracement reached as shown on the CFD Fibo Extension Technical Indicator Tool example illustrated below.
How to Draw Fib Extension CFDs Indicator Tool on Downwards CFD Trend
Please note where these CFD Fib Extension levels are plotted - 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 Fibo Extension Levels - 61.8% CFD Fibonacci Extension Level and 100.0% CFD Fib Extension Level.
