Downwards Trend CFD Retracement Technical Indicator CFD Strategy
How Do You Draw CFDs Fibonacci Retracement for CFD Downtrend?
The fibonacci retracement indicator is placed on a cfd chart in an downward cfd trending market and this CFDs Fibonacci Retracement indicator then calculates the retracement levels for the downward trend on the cfds charts. Fibonacci retracement levels indicator is used by many traders as a cfd retracement indicator.
In the CFD Retracement Strategy example explained and illustrated below the cfd market is heading downwards between chart point 1 and chart point 2, then after chart point 2 the cfd price then retraces up to 38.2% retracement level then it continues heading downward in the original downward trend. Note that this cfd Fibonacci retracement indicator is plotted from point 1 to point 2 in the direction of the trend (Downwards Direction).
Because we know this is just a retracement based on the cfds chart cfd trend we put a sell order at 38.2% Fibonacci retracement level and a stop loss just above 61.8% Fibonacci retracement level.
If you had put a sell order at the 38.2% Fibonacci retracement level as shown on the cfd trade below you would have made a lot of pips afterwards after the price reached the 38.2% Fibonacci retracement level and then resumed the downward cfds trend.
In this trade the retracement of cfd price reached 38.2% Fibo retracement level and did not get to 50.00% Fibo retracement level. It is always good to use 38.2% Fibonacci retracement level because most times the cfd price retracement doesn't always get to 50.00% Fibo retracement level.
Fibonacci Retracement Levels on CFDs Chart
Explanation for the Above CFDs Fib Retracement Strategy Examples
The above CFDs Fibonacci Retracement Strategy examples is a cfd retracement setup where the price retraces immediately after touching the 38.2% CFDs Fibonacci Retracement Level.
This CFDs Fibonacci Retracement level provided a lot of resistance for the cfd price retracement, this was the best place for a trader to set a sell limit order as a cfd market quickly moved down after hitting this 38.2% Fibonacci retracement level.
