What's Difference between FX Fibo Retracement and Forex Fibonacci Expansion?

Forex Trading Fib Retracement Levels

Fibo retracement is drawn between 2 chart points but Fibo expansion is drawn using Three chart points.

Fibonacci Retracement example below where the forex trend is moving down between Chart point 1 & Chart point 2, then after Chart point 2 the price retraces then it continues moving up in the original upwards trend. Note that this Fibonacci Retracement indicator is drawn from Chart point 1 to Chart point 2 in direction of the trend.

Fibo Retracement Levels - How to Draw Fibonacci Retracement Levels

Forex Trading Fib Expansion Levels

Fibo retracement is drawn between 2 chart points but Fibo expansion is drawn using Three chart points.

To draw these Fibonacci Expansion levels we wait until the price retracement is complete & the price starts to move in original direction of the Forex trend. Where the retracement reaches is used as chart point 3 for Fibonacci expansion.

The Fibonacci Expansion example below shows the 3 chart Points where the Fibonacci Expansion indicator is drawn, marked as chart point 1, 2 and 3. Chart point 1 is where the forex trend started, Chart point 2 is where the forex trend pulled back & retraced and Chart point 3 is where the retracement reached as illustrated & shown on the Fibonacci Expansion example below.

Fibo Expansion Levels - How to Draw Fibonacci Expansion Levels

Please note where these Fibonacci Expansion levels are plotted - Fibonacci Expansion zones are plotted above the Fib Expansion indicator, these are the points where a trader will place the take-profit orders.