How to Draw Fibonacci Projection CFDs Indicator Tool on Downwards CFD Trend
Trading CFDs Draw Fibonacci Projection for CFD Downtrend
We draw the Fibo Projection technical indicator tool from chart point 1 to chart point 2 to chart point 3 as illustrated & shown on the cfd example explained below. Remember we always draw this Fib 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 - downwards direction.
As a trader you would also have used Fibonacci Projection level 100.0%, just where the price reached as shown on the Fibonacci Projection example explained and illustrated below. That would have been a good take profit area.
How to Draw CFD Fib Projection on Downward CFD Trend - How to Draw Fibonacci Projection on Down CFD Trend
From the Fibonacci Projection technical indicator tool example above, after drawing this Fibonacci Projection technical indicator tool there are 2 levels that are used to show the profit taking levels, these two Fibonacci Projection levels are plotted as horizontal lines across the cfds chart marked as 61.8%Fibonacci Projection Level and 100% Fibonacci Projection Level.
Explanation of How to Draw Fibonacci Projection Zones on CFDs Charts
We use Fib Projection levels to estimate where the market trend movement will get to. There are 2 commonly used Fibonacci Projection levels: 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these are used for setting taking profit levels.
To draw Fib Projection 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. Fibonacci Projection Indicator tool is drawn using three chart points as shown on the cfd example explained below of how to draw the Fibonacci Projection Indicator Tool.
The Fib Projection examples described below shows the Three Chart Points where the Fib Projection indicator is drawn, 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 Fibo Projection Technical Indicator Tool example explained below.
How to Draw Fib Projection CFDs Indicator Tool on Downwards CFD Trend
Please note where these Fibonacci Projection levels are plotted - Fib Projection zones are plotted above the Fibo technical indicator, these are the chart points where one will set the take profit orders using these Fibonacci Projection Levels - 61.8% Fibonacci Projection Level and 100.0% Fibonacci Projection Level.
