Trading Stocks Read and Draw Stocks Fibonacci Expansion Levels
How Do I Draw Stocks Fibonacci Expansion Levels?
Traders use Fibonacci expansion levels to estimate where the trend movement will reach. There are two commonly used Fibonacci expansion levels - 61.8% Stocks Fibonacci Expansion Level and 100% Stocks Fibonacci Expansion Levels, these fibonacci expansion levels are used for setting stocks trading take profit levels.
To draw Stocks Fibonacci Expansion levels on the stock chart we wait until the stocks price retracement is complete and the price starts to move in original direction of the trend. Where the stocks price retracement reaches is used as chart point 3. Fibonacci Expansion Stocks Indicator is plotted using three chart points as shown on the Fibonacci expansion stocks example illustrated and explained below of how to plot the Fibonacci Expansion Stock Indicator Tool.
The Fibonacci expansion example illustrated and explained below shows the 3 Stocks Chart Points where the Fibonacci expansion stocks indicator is drawn, marked as Stocks Trading Chart point 1, Stocks Trading Chart point 2 & Stocks Trading Chart point 3.
Stocks Chart point 1 is where the stocks trend started, Stocks Trading Chart point 2 is where the stocks trend pulled back and retraced & Stocks Chart point 3 is where the stocks retracement reached as shown on the Fibonacci Expansion Stock Indicator Tool examples illustrated & described below.
Read and Draw Stocks Fibonacci Expansion Levels? - How Do I Draw Stocks Fibonacci Expansion Levels?
Please note where these Stocks Fib Expansion zones are plotted - Stocks Fibo Expansion zones are plotted above the Fibonacci stocks technical indicator, these are chart points where a trader will place the stocks take profit orders using these Stocks Fibo Expansion Levels - 61.80% & 100.00% 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 two commonly used Fibonacci expansion areas: 61.8%Stocks Fibo Expansion Level & 100% Stocks Fibonacci Expansion Level, these Stocks Fibonacci Expansion Levels are used for taking profit.
On the Fibonacci expansion indicator 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 levels indicator is drawn upwards.
These Fibo expansion levels are displayed as horizontal lines above the stocks trading Fibonacci Expansion technical indicator, showing stocks profit taking areas. In the stocks example illustrated and explained below if you had used of 100.0% Fibonacci expansion level you would have made nice profit from the trade set-up.
Drawing Fibonacci Expansion Levels Stock Indicator on an Upward Stocks Trend
From above Fibonacci expansion indicator example, the upwards trend continued & both 61.80% & 100.00% Fibo 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 the Fibonacci expansion indicator tool to estimate stocks trading take profit levels, how do we draw Fibonacci Expansion in a downward Stocks trend?
We draw the Fibonacci expansion tool from chart point 1 to chart point 2 to chart point 3 as shown on the Fibonacci expansion stocks example illustrated and explained below. Remember we always draw this Fibonacci expansion tool in direction of the trend. In the Fibonacci expansion example illustrated and explained below, can you figure what direction we have drawn it? That's right - downward direction.
Try & identify the difference between how we have drawn Fibonacci expansion levels indicator above and how Stocks Fibonacci Expansion levels indicator is drawn below. This time you would also have used Fibonacci expansion level 100.0%, just where the price reached as illustrated on the Fibonacci expansion levels stocks example illustrated and explained below. This would have been a good stocks take profit area.
Drawing Fibonacci Expansion Levels Stock Indicator on a Downward Stocks Trend
From the Fibonacci expansion levels indicator example above, after plotting this Fibonacci expansion levels stocks tool there are two levels that are used to show the stocks trading profit taking areas - these two Fibonacci expansion levels are drawn as horizontal lines across the stocks price chart marked as 61.8% Stocks Fibo Expansion Level & 100% Stocks Fibo Expansion Level.
Read and Draw Stocks Fibonacci Expansion Levels?
