How to Draw Fibonacci Projection CFDs Indicator Tool on CFDs Charts
How Do You Use Fibo Projection Zones on CFD Chart?
We use Fibo Projection levels to estimate where the market trend movement will get to. There are 2 important Fibo Projection levels: 61.80% and 100% Fibo Projection Levels, these are used for taking profit.
To plot Fibonacci Projection zones 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. Fibonacci Projection Indicator is drawn using three chart points as illustrated and shown on the cfd example explained below of how to draw the Fibonacci Projection Indicator Tool.
The Fibonacci Projection examples explained below shows the Three Chart Points where the Fibonacci Projection 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 & retraced and Chart point 3 is where the cfd retracement reached as displayed on the Fibo Projection Technical Indicator Tool examples explained below.
How to Trade With Fibonacci Projection - How to Draw Fibonacci Projection Zones on CFD Charts
Please note where these Fibonacci Projection levels are drawn - Fibo Projection levels are plotted above Fibo technical indicator, these are the chart points where a trader will place take profit orders using these Fibo Projection Levels - 61.8% & 100.00% Fib Projection Zones.
Drawing Fibonacci Projection Zones on an Upwards CFD Trend
We use Fibo Projection levels to estimate where the market trend movement will get to. There are 2 important 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 technical 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 technical indicator is drawn upwards.
These Fibonacci Projection zones are displayed as horizontal lines above Fib Projection indicator, showing profit-taking areas. In the cfd example explained below if you had used 100.0% Fibonacci Projection level you would have made good profit from the trade setup.
Drawing Fibonacci Projection Indicator on an Upwards CFD Trend - Fib Projection Trading Tool
From the above Fibonacci Projection technical 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 CFD Trend
Since we use the Fibonacci Projection technical indicator to estimate take profit levels, how do we draw Fibo Projection in a downwards CFD trend?
We draw the Fibo Projection technical indicator tool from chart point 1 to chart point 2 to chart point 3 as illustrated and shown on the cfd examples explained below. Remember we always plot this Fibonacci Projection tool in the direction of the market 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 technical indicator above and how Fibonacci Projection technical 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 cfd example explained and illustrated below. That would have been a good take profit area.
Drawing Fibonacci Projection Indicator on a Downwards CFD Trend - Fib Projection Trading Tool
From the Fibonacci Projection technical indicator example above, after drawing this Fibonacci Projection tool there are two levels that are used to show the profit-taking areas, these two Fibonacci Projection levels are plotted as horizontal lines across the cfd price chart marked as 61.8%Fibo Projection Level and 100% Fibonacci Projection Level.
