How to Draw Fib Projection on Downward Forex Trend - How to Draw Fibonacci Projection on Down Forex Trend
Drawing Fibo Projection Levels on a Downwards Forex Trend
We draw the Fibo Projection technical indicator tool from chart point 1 to chart point 2 to chart point 3 as illustrated & shown on example below. Remember we always plot this Fibo Projection tool in direction of the market trend. In the Fibonacci Projection 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 Projection level 100.0%, just where the price reached as illustrated on the Fibonacci Projection example below. That would have been a good take profit area.
How to Draw Fib Projection on Downward Forex Trend - How to Draw Fibonacci Projection on Down Forex Trend
From the Fibonacci Projection technical indicator tool example above, after drawing this Fibonacci Projection technical indicator tool there are 2 levels that are used to show the profit taking levels, these two Fibonacci Projection levels are plotted as horizontal lines across the forex chart marked as 61.8% Forex Trading Fib Projection Level and 100% Fibonacci Projection Level.
Explanation of How to Draw Fibonacci Projection Zones on Forex Charts
We use Fibo Projection levels to estimate where the market trend movement will get to. There are 2 commonly used Fibonacci Projection levels: 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these are used for setting taking profit levels.
To draw Fibo Projection levels on 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 Projection Indicator tool is drawn using three chart points as shown on example below of how to draw the Fibonacci Projection Indicator Tool.
The Fibonacci Projection example below shows the 3 Chart Points where the Fibonacci Projection 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 illustrated on the Fib Projection Technical Indicator Tool example below.
How to Draw Fib Projection Indicator on Downwards Forex Trend
Please note where these Fibonacci Projection levels are drawn - Fibo Projection levels are plotted above Fibo indicator, these are chart points where one will set takeprofit orders using these Fibonacci Projection Levels - 61.8% Fibonacci Projection Level and 100.0% Fibonacci Projection Level.
