How to Use Fibonacci Extension in Forex - How to Use Fibonacci Extension Levels
We use Fibonacci Extension levels to estimate where the trend movement will reach. There are 2 important Fibo Extension areas: 61.8% & 100% Fibonacci Extension Levels, these are used for taking profit.
To draw Fibonacci Extension levels on MT4 forex chart we wait until the price retracement is complete & the price starts to move in original direction of the Forex trend. Where the price retracement reaches is used as chart point 3. Fibonacci Extension MT4 Indicator is drawn using 3 chart points as displayed on the example below of how to draw the Fibonacci Extension Indicator MetaTrader 4 Tool.
The Fibo Extension MetaTrader 4 Indicator example below shows the 3 Chart Points where the Fibo Extension MetaTrader 4 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 Fibo Extension MetaTrader 4 Indicator Tool example below.
How to Use Fibonacci Extension in Forex PDF - How to Use Fibonacci Extension Levels - Fibonacci Extension Guide
How to Use Fibonacci Extension in Forex PDF - How to Use Fibonacci Extension Levels - Fibonacci Extension Guide
Please note where these Fibonacci Extension levels are plotted - Fibo Extension zones are plotted above the MT4 Fibonacci indicator, these are chart points where one will set takeprofit orders using these Fibonacci Extension Levels - 61.8% & 100.0% Fibo Extension Levels.
Upward Forex Trend - How to Use Fibonacci Extension in Forex PDF - How to Use Fibonacci Extension Levels - Fibonacci Extension PDF
We use Fibonacci Extension levels to estimate where the trend movement will reach. There are 2 important Fibo Extension areas: 61.80% Forex Fibonacci Extension Level and 100% Fibonacci Extension Level, these Fib Extension Levels are used for taking profit.
On the Fibo Extension MetaTrader 4 indicator example below you can see that the Fibo Extension MetaTrader 4 technical indicator tool is drawn along the direction of the trend, since the trend is upwards - the MT4 Fibonacci Extension technical indicator is plotted upwards.
These Fibo Extension zones are displayed as horizontal lines above the Fibo Extension MetaTrader 4 technical indicator, showing profit taking areas. In the forex trading example below if you had used of 100.0% Fibo Extension level the you would have made good profit from this setup.
Upwards Forex Trend - How to Use Fibonacci Extension in Forex PDF - How to Use Fibonacci Extension Levels - Fibonacci Extension Guide
How to Use Fibonacci Extension in Forex PDF - Fibonacci Extension Levels
From the above Fibo Extension MetaTrader 4 indicator example, upward trend continued and both 61.8% & 100.0% Fibo Extension zones were all hit after which price retraced again after getting to the 100.00% Fibo Extension level.
Downwards Forex Trend - How to Use Fibonacci Extension in Forex - Fibonacci Extension Levels
Since we use the Fibo Extension MetaTrader 4 indicator tool to estimate take profit levels, how do we draw MetaTrader 4 Fibonacci Extension in a downward Forex trend?
We draw the Fibo Extension MetaTrader 4 indicator tool from chart point 1 to chart point 2 to chart point 3 as shown on the forex trading example below. Remember we always plot this Fibo Extension MetaTrader 4 indicator tool in direction of the market trend. In the Fibonacci Extension example below, can you figure what is direction that we have drawn it? That is right - downwards direction.
Try and spot the difference between how we have drawn Fibo Extension indicator above and how Fibo Extension technical indicator is plotted below. This time you would also have used Fibonacci Extension level 100.00%, just where the price reached as illustrated on the forex trading example below. That would have been a good take profit level.
Downwards Forex Trend - How to Use Fibonacci Extension in Forex - How to Use Fibo Extension Zones
How to Use Fib Extension in Forex Trading Tutorial - Fib Extension Levels
From the Fibo Extension MetaTrader 4 indicator examples above, after drawing this MetaTrader 4 Fibonacci Extension tool there are 2 levels that are used to show the profit-taking areas, these 2 Fibonacci Extension levels are plotted as horizontal lines across the forex price chart marked as 61.8% Forex Fibo Extension Level and 100% Fibonacci Extension Level.
