How to Draw Fib Expansion on Downward Forex Trend - How to Draw Fibonacci Expansion Indicator on Downwards Trend
Drawing Fibo Expansion Levels on a Downwards Forex Trend - Fibonacci Expansion Forex Downtrend
We draw the Fibonacci Expansion indicator from chart point 1 to chart point 2 to chart point 3 as shown on 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 take profit area.
How to Draw Fib Expansion on Downward Forex Trend - How to Draw Fibonacci Expansion on Down Forex 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 profit taking levels, these two Fibonacci Expansion levels are plotted as horizontal lines across the forex chart marked as 61.8% Forex Fibo Expansion Level and 100% Fibonacci Expansion Level.
Explanation of How to Draw Fibonacci Expansion Levels on Forex Charts
We use Fibo Expansion levels to estimate where the trend movement will reach. There are 2 commonly used Fibo Expansion areas: 61.8% Fibo Expansion Level and 100% Fibonacci Expansion Areas, these are used for setting taking profit levels.
To draw Fibonacci Expansion levels on the forex chart we wait until the 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 Indicator tool is drawn using three chart points as shown on example below of how to draw the Fibonacci Expansion Technical Indicator Tool.
The Fibonacci Expansion example below shows the 3 Chart Points where the Fibonacci Expansion technical indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the forex trend started, Chart point 2 is where the forex trend pulled back and retraced & Chart point 3 is where the forex retracement reached as displayed on the Fibonacci Expansion Indicator Tool example below.
How to Draw Fib Expansion Indicator on Downwards Forex Trend
Please note where these Fibonacci Expansion zones are drawn - Fibo Expansion zones are plotted above the Fibonacci indicator, these are chart points where one will set takeprofit orders using these Fibonacci Expansion Levels - 61.8% Fibonacci Expansion Level and 100.0% Fibo Expansion Level.
