How Do You Draw Fibonacci Extension Levels on Upward Forex Trend?
How Do You Draw Fibonacci Extension Levels on Upward Forex Trend?
We use Fibonacci Extension levels to estimate where the trend movement will reach. There are 2 commonly used Fibonacci Extension levels: 61.80%Fibonacci Extension Level and 100% Fibonacci Extension Level, these Fibonacci Extension Levels are used for setting forex take profit levels.
On the Fibonacci Extension indicator example below you can see that the Fibonacci Extension technical indicator tool is plotted along the direction of the trend, since the trend is up - the Fibonacci Extension technical indicator is drawn upwards.
These Fibonacci Extension levels are displayed as horizontal lines above the Fibonacci Extension indicator, showing forex profit taking areas. In the forex example below if you had used of 100.0% Fibo Extension level you would have made good profit from using this setup.
How Do You Draw Fibonacci Extension Levels on Upward Forex Trend?
From the above Fibonacci Extension indicator tool example, the upward trend continued & both 61.80% and 100.00% Fibonacci Extension zones were all hit after which the forex price retraced again after getting to the 100.00% Fibonacci Extension level.
From the Fibo Extension indicator tool examples above, after plotting this Fibonacci Extension tool there are 2 levels that are used to show the forex profit taking areas, these two Fibo Extension levels are drawn as horizontal lines across the forex chart marked as 61.8% Forex Trading Fib Extension Level & 100% Fibo Extension Level.
Explanation of How Do You Draw Fibonacci Extension Levels on Forex Charts?
We use Fibonacci Extension levels to estimate where the trend movement will reach. There are 2 important Fibonacci Extension levels: 61.80% and 100% Fibo Extension Levels, these are used for taking profit.
To draw Fibo Extension levels on the forex chart we wait until the forex price retracement is complete & the price starts to move in original direction of the Forex trend. Where the forex price retracement reaches is used as chart point 3. Fibo Extension Indicator is plotted using three chart points as illustrated on the Fibonacci extension forex example below of how to plot the Fibonacci Extension Technical Indicator.
The Fibonacci Extension example below shows the 3 Forex Chart Points where the Fibonacci Extension forex technical indicator is drawn, marked as Forex Chart point 1, Forex Chart point 2 and Forex Chart point 3.
Forex Chart point 1 is where the forex trend started, Forex Chart point 2 is where the forex trend pulled back & retraced & Forex Chart point 3 is where the forex retracement reached as displayed on the Fibonacci Extension Indicator example below.
How Do You Draw Fibonacci Extension Levels on Upward Forex Trend?
Please note where these Fibo Extension areas are drawn - Fibo Extension zones are plotted above the Fibo forex indicator, these are the chart points where one will set forex take profit orders using these Fibonacci Extension Levels - 61.80% and 100.00% Fibonacci Extension Levels.
How Do You Draw Fibonacci Extension Levels on Upward Forex Trend?
