How Do You Draw Fib Projection Levels?
How Do You Draw Fib Projection Levels?
Traders use Fibonacci projection levels to estimate where the market trend movement will get to. There are two commonly used Fibonacci projection levels - 61.8% Fib Projection Level and 100% Fibonacci Projection Levels, these fibonacci projection levels are used for setting forex take profit levels.
To draw Fib Projection areas on trading chart we wait til the price retracement is complete and price begins heading in original direction of market trend. Where the price pull back gets-to is used as point 3. Fibo Projection Indicator is plotted using 3 chart points as illustrated and shown on Fibo projection trading example below of how to plot the Fib Projection Technical IndicatorTool.
The Fib projection example below shows the 3 Chart Points where the Fib projection trading technical indicator is drawn, marked as Chart point 1, Chart point 2 and Chart point 3.
Chart point 1 is where trend started, Chart point 2 is where trend pulled back and retraced & Chart point 3 is where the retracement reached as illustrated and shown on Fibo Projection Indicator Tool example below.
How Do You Draw Fibonacci Projection Levels?
Please note where these Fib Projection areas are plotted - Fibo Projection zones are plotted above the Fibonacci indicator, these are the chart levels where one will set forex takeprofit orders using these fib Projection Levels - 61.8% and 100.0% Fibonacci Projection Levels.
Drawing Fib Projection Zones on an Upwards Forex Trend
We use Fibo expansion levels to estimate where the market trend movement will get to. There are two commonly used Fibonacci projection levels: 61.8% Forex Fib Projection Level and 100% Fibonacci Projection Level, these Fibonacci Projection Levels are used for taking profit.
On the Fib projection trading indicator example below you can see that the Fibonacci projection indicator is plotted along the direction of the trend, since the trend is upward - the Fibonacci projection levels trading indicator is drawn upward.
These Fib projection levels are displayed as horizontal lines above the Fib Projection trading indicator, showing fx profit taking zones. In the trading example below if you had used of 100.0% Fibonacci projection level you would have made nice profit from the trade set-up.
Drawing Fib Projection Levels Indicator in an Upward Trend
From the above Fibonacci projection trading indicator example, upward trend continued and both 61.8% & 100.0% Fibonacci projection levels were all hit after which price retraced again after getting to the 100.00 % Fibonacci Projection level.
Drawing Fib Projection Areas on a Downwards Forex Trend
Since we use the Fibonacci projection indicator tool to estimate forex takeprofit zones, how do we draw Fib Projection in a downward trend?
We draw the Fibonacci projection indicator tool from chart point 1 to chart point 2 to chart point 3 as illustrated & shown on the Fibo projection trading example below. Remember we always draw this Fib projection tool in direction of the trend. In the Fib projection example below, can you figure what is direction that we have drawn it? That is right - downwards direction.
Try & identify the difference between how we have drawn Fibo projection levels trading indicator above and how Fib Projection levels trading indicator is drawn below. This time you would also have used Fibonacci projection level 100.0%, just where price reached as shown on the Fibonacci projection levels trading example below. This would have been a good take profit zone.
Drawing Fib Projection Levels Indicator in a Downward Trend
From Fibonacci projection levels trading indicator example above, after plotting this Fibonacci projection levels trading forex tool there are 2 levels that are used to show the forex profit taking areas - these two Fibonacci projection levels are drawn as horizontal lines across the price chart marked as 61.8% Forex Fibonacci Projection Level and 100% Fibo Projection Level.
How Do I Draw Fib Projection Levels?
