Fib Extension Indicator Tutorial

We use Fib Extension Areas to estimate where the trend movement will reach. There are two important Fib Extension areas: 61.8% and 100% Fib Extension Areas, these are used for taking profit.

To draw Fib Extension levels on the MT4 chart we wait until the price retracement is complete & the price starts to move in original direction of the trend. Where the price retracement reaches is used as chart point 3. Fib Extension MetaTrader 4 Indicator is drawn using 3 chart points as displayed on the examples displayed below of how to draw the Fibo Extension Indicator MT4 Tool.

The Fibo Extension MetaTrader 4 Indicator example shown below shows the 3 Chart Points where the Fibo Extension MetaTrader 4 technical indicator is plotted, marked as Chart point 1, Chart point 2 and Chart point 3.

Chart point 1 is where the trend started, Chart point 2 is where the trend pulled back and retraced & Chart point 3 is where the retracement reached as highligthed on the Fibo Extension MetaTrader 4 Indicator Tool example shown below.

Fib Extension XAUUSD Tutorial - Fib Extension Indicator Guide

Fib Extension XAUUSD Tutorial - Fib Extension Indicator Tutorial - Fib Extension Levels Tutorial

Please note where these Fib Extension levels are plotted - Fibo Extension zones are drawn above the MT4 Fibonacci indicator, these are the chart points where a trader will set the take-profit orders using these Fibo Expansion Levels - 61.8% & 100.0% Fibo Extension Levels.

Upward Trend - Fibonacci Extension XAUUSD Tutorial - Fib Extension Indicator PDF - Fib Extension Levels Tutorial

We use Fib Extension Areas to estimate where the trend movement will reach. There are two important Fibo Extension areas: 61.8%Fib Extension Level and 100% Fibonacci Extension Level, these Fibo Extension Areas are used for taking profit.

On the Fibo Extension MetaTrader 4 indicator example illustrated & shown below you can see that the Fibo Extension MetaTrader 4 technical indicator is drawn along the direction of the trend, since the trend is upward - the MetaTrader 4 Fib Extension technical indicator is plotted upwards.

These Fibo Extension levels are shown as horizontal lines above the Fibo Extension MetaTrader 4 technical indicator, showing profit taking areas. In the examples shown below if you had used of 100.0% Fibo Extension level the you would have made good profit from this setup.

Upward Trend - Fibonacci Extension XAUUSD Tutorial - Fib Extension Indicator Guide

Fib Extension Indicator Guide - Fib Extension Levels Tutorial

From the above Fibo Extension MetaTrader 4 indicator examples, the upwards trend continued & both 61.8% & 100.0% Fibo Extension levels were all hit after which price retraced again after getting to the 100.00% Fib Extension level.

Fib Extension XAUUSD Tutorial

Since we use the Fibo Extension MetaTrader 4 indicator tool to estimate take profit levels, how do we draw MetaTrader 4 Fib Extension in a downwards trend?

We draw the Fibo Extension MetaTrader 4 indicator from chart point 1 to chart point 2 to chart point 3 as displayed on the examples shown below. Remember we always plot this Fibonacci Extension MT4 technical indicator tool in direction of the trend. In the Fibo Extension example shown below, can you figure what direction we have plotted it? That's right - downwards direction.

Try & spot difference between how we have drawn Fibo Extension indicator above & how Fibo Extension technical indicator is plotted below. This time you'd also have used Fibo Extension level 100.0%, just where the price reached as displayed on the example shown below. That would have been a good take profit level.

Downward Trend - Fibonacci Extension XAUUSD Tutorial - Fib Extension Indicator Guide

Fib Extension Indicator Guide - Fib Extension Levels Tutorial

From the Fibo Extension MetaTrader 4 indicator examples above, after drawing this MetaTrader 4 Fib Extension tool there are 2 levels which are used to show the profit taking areas, these 2 Fib Extension areas are plotted as horizontal lines across the price chart marked as 61.8%Fib Extension Level and 100% Fibonacci Extension Level.