How Do I Draw Fib Extension Levels on Downward Trend?

How Do You Draw Fib Extension Levels on Downward Trend?

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

As a trader you'd also have used Fibo Extension level 100.0%, just where the price reached as pictured on the Fibo Extension example shown below. That would have been a good takeprofit zone.

How Do I Draw Fib Extension Levels on Downward Trend?

From the Fib Extension tool example above, after drawing this Fibo Extension indicator tool there are two levels that are used to show the profit taking levels - these two Fibo Extension levels are represented as horizontal lines across the chart marked as 61.8% Fib Extension Level & 100 % Fibonacci Extension Level.

Interpretation of How Do You Draw Fib Expansion Levels on Charts?

Traders Fibo Extension areas to estimate where the price move will reach. There are two commonly used Fibo Extension areas: 61.8% Fibonacci Extension Level & 100 % Fibo Extension Levels - these fibonacci extension levels are used for setting xauusd taking profit zones.

To draw Fibo Extension areas on the chart we wait til the price retracement is complete & the price begins heading in original direction of trend. Where the price pull back gets-to is used as point 3. Fibonacci Extension Indicator is plotted using 3 chart points as pictured on the Fib extension example illustrated & shown below of how to draw the Fibo Extension Indicator.

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

Chart point 1 is where trend started, Chart point 2 is where price pulled back and retraced and Chart point 3 is where the retracement reached as portrayed on the Fibo Extension Indicator example pictured below.

How Do You Draw Fibo Expansion Levels on Downwards Trend?

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

How Do You Draw Fibo Expansion Levels on Downward Trend?