How Do I Analyze Fibonacci Expansion Levels in Stocks?

Trading Stocks Read Fibonacci Expansion Levels in Stocks

Fibonacci expansion stocks technical indicator is drawn using Three chart points.

To draw Stocks Fibonacci Expansion levels on stock charts we wait until the stocks price retracement is complete and the price starts to move in original direction of the Stocks trend. Where the stocks price retracement reaches is used as chart point 3.

The Fibonacci expansion stocks example illustrated and explained below shows the 3 Stock Chart Points where the Fibonacci expansion stocks indicator is drawn, marked as Stock Chart point 1, 2 and 3. Stock Chart point 1 is where the stocks trend started, Stock Chart point 2 is where the stocks trend pulled back and retraced & Stock Chart point 3 is where the price retracement reached as illustrated on the Fibonacci Expansion Stocks Tool stocks examples illustrated & described below.

Stocks Trade With Stock Fibonacci Expansion?

Please note where these Stocks Fibonacci Expansion zones are plotted on the stock chart - Stocks Fibo Expansion zones are plotted above the Fibonacci Stock Indicator, these are the points where the trader will set the stocks take profit orders using these Stocks Fibo Expansion Levels - 61.80% & 100% Stocks Fibonacci Expansion Levels.

Drawing Fibonacci Expansion Levels on an Upward Stock Trend

We use Fibo expansion levels to estimate where the market trend movement will reach. There are 2 important Fibo expansion areas: 61.8% and 100% Stocks Fibonacci Expansion Levels, these Stocks Fibonacci Expansion Levels are used for taking stocks trading profit.

On the Fibonacci expansion stocks example illustrated and explained below you can see that the Fibonacci expansion technical indicator is plotted along the direction of the trend, since the trend is upward - the Fibonacci expansion indicator is drawn upwards.

These Fibo expansion levels are displayed as horizontal lines above the stocks trading Fibonacci Expansion technical technical indicator, showing profit taking areas. In the stocks example illustrated and explained below if you had used of 100% Fibonacci expansion level you would have made nice stocks trading profit from the stocks trade setup.

Drawing Fib Expansion Levels on an Upward Stocks Trend - Stocks Fibonacci Expansion Strategies in Stocks

From the above Fibonacci expansion stocks examples, the upward trend continued & both 61.80% & 100.0% Fibonacci expansion levels were all hit after which stocks price retraced again after getting to the 100.0 % Stocks Fibonacci Expansion level.

Drawing Stocks Fib Expansion Areas on a Downward Stocks Trend

Since we use this Fibo expansion stocks tool to estimate stocks take profit levels, how do we draw it in a downward Stocks trend?

We draw the Fibonacci expansion indicator from chart point 1 to 2 to 3 as shown below. Remember we always draw this Fibonacci expansion stocks tool in direction of the trend. In the Fibonacci expansion stocks example illustrated and explained below, can you figure what direction we have drawn it? That is right - downwards direction.

Try & identify the difference between how we have drawn stocks Fibonacci expansion levels above and how Fibonacci Expansion indicator is drawn below. This time you would also have used Fibonacci expansion level 100%, just where the price reached as illustrated on the stocks example illustrated and explained below. That would have been a nice stocks take profit area.

Drawing Fib Expansion Areas on a Downward Stocks Trend - Stocks Fibonacci Expansion Strategies in Stocks

From the Fibonacci expansion stocks example above, after plotting this Fibonacci expansion tool there are two levels that are used to show the stocks profit taking areas, these two Fibonacci expansion levels on the stocks indicator are drawn as horizontal lines across the stocks price chart.

How Do You Analyze Fibonacci Expansion Levels in Stocks?