How Do You Draw Fib Expansion Levels on Downward Forex Trading Trend?
How Do You Draw Fib Expansion Levels on Downward Forex Trading Trend?
We draw the Fibonacci Expansion indicator from chart point 1 to chart point 2 to chart point 3 as shown on the Fibonacci expansion forex trading example below. Remember we always plot this Fibonacci Expansion tool in direction of the trend. In the Fibonacci Expansion example below, can you figure what is direction that we have drawn it? That is right - downwards direction.
As a trader you would also have used Fibonacci Expansion level 100.0%, just where the price reached as illustrated on the Fibonacci Expansion example below. That would have been a good forex take profit area.
How Do You Draw Fib Expansion Levels on Downward Forex Trading Trend?
From the Fibonacci Expansion tool example above, after drawing this Fibonacci Expansion indicator tool there are 2 levels that are used to show the forex profit taking levels - these two Fibonacci Expansion levels are represented as horizontal lines across the forex chart marked as 61.8% FX Fibo Expansion Level and 100% Fibonacci Expansion Level.
Interpretation of How Do You Draw Fibonacci Expansion Levels on Forex Charts?
Forex traders Fibonacci Expansion levels to estimate where the price movement will reach. There are 2 commonly used Fibonacci Expansion areas: 61.8% Fibonacci Expansion Level and 100% Fibonacci Expansion Levels - these fibonacci expansion levels are used for setting forex taking profit levels.
To draw Fibonacci Expansion 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. Fibonacci Expansion Forex Indicator tool is drawn using three chart points as illustrated on the Fib expansion forex trading example below of how to draw the Fibonacci Expansion Tool.
The Fibonacci Expansion example below shows the 3 Forex Chart Points where the Fibonacci Expansion 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 price pulled back & retraced & Forex Chart point 3 is where the forex retracement reached as displayed on the Fibonacci Expansion Forex Tool example below.
How Do You Draw Fib Expansion Levels on Downward Forex Trading Trend?
Please note where these Fibonacci Expansion zones are drawn - Fibo Expansion zones are plotted above the Fibonacci forex indicator, these are the chart points where one will set forex take profit orders using these Fibonacci Expansion Levels - 61.8% Fibonacci Expansion Level and 100.0% Fibo Expansion Level.
How Do You Draw Fib Expansion Levels on Downward Forex Trading Trend?
