How Do I Analyze Fibo Retracement vs Fibonacci Expansion?

How Do You Trade Fibo Retracement vs Fibonacci Expansion?

Fibonacci retracement is drawn between 2 chart points but Fibo expansion is drawn using Three chart points.

Fibo Retracement indicator example below - where the trend is moving downwards between Chart point 1 & Chart point 2 - then after Chart point 2 the price retraces then it continues moving up in the original upward trend. Note that this Fibonacci Retracement indicator is drawn from Chart point 1 to Chart point 2 in direction of the market trend.

How Do You Interpret Fibo Retracement vs Fibonacci Expansion?

Forex Fibonacci Extension Levels

Fibo retracement indicator is drawn between 2 chart points but Fib expansion is drawn using 3 chart points.

To draw these Fibo Expansion levels traders will wait until the price retracement is complete & the price starts heading in original direction of trend. Where the price retracement reaches - this point is used as chart point 3 for Fib expansion indicator.

The Fibo Expansion indicator example below shows the 3 chart areas where the Fibo Expansion indicator tool is plotted, labeled as chart point 1, 2 & 3. Point 1 is where trend started, Point 2 is where price pulled back & retraced and Chart point 3 is where the price retracement reached as illustrated on the Fibo Expansion indicator example below.

How Do You Interpret Fibo Retracement vs Fib Expansion?

Please note where these Fibonacci expansion levels are drawn - Fibo Expansion levels are plotted above the Fibo Expansion indicator tool - these are the points where a trader will set take-profit orders.

How Do You Interpret Fibo Retracement vs Fibonacci Expansion?