How to Draw Fibo Extension on Up Trend
Drawing Fibonacci Extension Zones on an Upwards Trend
We use Fibonacci Extension Levels to project where the market trend movement will get to. There are two oftenly used Fib Extension areas: 61.8%Fib Extension Level and 100% Fibonacci Extension Level, these Fibo Extension Levels are used for setting take profit areas.
On the Fibo Extension indicator example illustrated & shown below you can see that the Fibo Extension technical indicator is drawn along the direction of the trend, since the trend is upward - the Fibo Extension technical indicator is plotted upwards.
These Fib Extension levels are shown as horizontal lines above the Fibonacci Extension technical indicator, showing the profit booking zones. In the examples shown below if you had used of 100.0% Fibo Extension area you would have made a nice profit from using this setup.
How to Draw Fibonacci Extension on Upward Trend - How to Draw Fibo Extension on Up Trend
From the above Fib Extension indicator tool example, the upward trend continued and both 61.8% & 100.00% Fibo Extension levels were all hit after which the price retraced again after getting to the 100.0 % Fib Extension level.
From the Fibo Extension tool example above, after drawing this Fib Extension tool there are 2 levels which are used to show the profit booking zones, these 2 Fib Extension areas are plotted as horizontal lines across the chart marked as 61.8%Fibonacci Extension Level and 100% Fib Extension Level.
Explanation of How to Draw Fib Extension Levels on Charts
We use Fib Extension Areas to project where the market trend movement will get to. There are two important Fibonacci Extension areas: 61.8% & 100 % Fib Extension Areas, these are used for profit taking.
To draw Fibo Extension levels on the chart we wait until the price retracement is complete and the price begins heading in original direction of trend. Where the price pull back gets-to is used as point 3. Fib Extension Indicator is drawn using 3 chart points as shown on the examples displayed below of how to draw the Fibo Extension Technical IndicatorTool.
The Fibo Extension example displayed 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 trend pulled back and retraced and Chart point 3 is where the retracement reached as highlighted on the Fibo Extension Indicator Tool example shown below.
How to Draw Fibo Extension Tool on Upward Trend
Please note where these Fibo Extension levels are plotted - Fib Extension zones are drawn above the Fibonacci indicator, these are the chart levels where a trader will set the take-profit orders using these Fibo Expansion Levels - 61.8% & 100.0% Fib Extension Levels.
