Trading Stocks Read and Draw Fibonacci Projection Levels
Stocks Draw Fibo Projection Levels
Traders use Fibonacci projection levels to estimate where the trend movement will reach. There are two commonly used Fibonacci projection levels - 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these fibonacci projection levels are used for setting stocks trading take profit levels.
To draw Fib Projection levels on the stocks 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 Projection Stocks Indicator is plotted using three chart points as shown on the Fibonacci projection stock examples illustrated & described below of how to plot the Fibonacci Projection Stock Indicator Tool.
The Fibonacci projection example illustrated and explained below shows the 3 Stocks Trading Chart Points where the Fibonacci projection 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 Projection Stock Indicator Tool examples illustrated & described below.
Read and Draw Fibonacci Projection Levels - Draw Fibonacci Projection Levels?
Please note where these Fibonacci Projection areas are plotted - Fibo Projection 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 Fibonacci Projection Levels - 61.80% & 100.00% Fibo Projection Zones.
Drawing Fibo Projection Zones 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 projection levels: 61.8%Fibonacci Projection Level and 100% Fibonacci Projection Level, these Fibonacci Projection Levels are used for taking profit.
On the Fibonacci projection indicator example illustrated and explained below you can see that the Fibonacci projection technical indicator is plotted along the direction of the trend, since the trend is upward - the Fibonacci projection levels indicator is drawn upwards.
These Fibonacci projection levels are displayed as horizontal lines above the Fibonacci Projection stocks trading technical indicator, showing stocks profit taking areas. In the stock trading examples illustrated & described below if you had used 100.00% Fibo projection level the you would have made a good profit from this trade setup.
Drawing Fibo Projection Zones Trading Stock Indicator on an Upward Stocks Trend
From the above Fibonacci projection indicator examples, the upwards trend continued & both 61.80% & 100.0% Fibonacci projection levels were all hit after which stocks price retraced again after getting to the 100.0% Fibo Projection level.
Drawing Fibo Projection Areas on a Downward Stock Trend
Since we use the Fibonacci projection indicator tool to estimate stocks trading take profit levels, how do we draw Fibonacci Projection in a downward Stocks trend?
We draw the Fibonacci projection tool from chart point 1 to chart point 2 to chart point 3 as shown on the Fibonacci projection stock examples illustrated & described below. Remember we always draw this Fibonacci projection tool in direction of the trend. In the Fibonacci projection 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 projection levels indicator above and how Fibonacci Projection levels indicator is drawn below. This time you would also have used Fibonacci projection level 100.0%, just where the price reached as illustrated on the Fibonacci projection levels stock trading example illustrated and explained below. This would have been a good stocks take profit area.
Drawing Fibo Projection Zones Trading Stock Indicator on a Downward Stocks Trend
From the Fibonacci projection levels indicator example above, after plotting this Fibonacci projection levels stocks tool there are two levels that are used to show the stocks trading profit taking areas - these two Fibonacci projection levels are drawn as horizontal lines across the stocks price chart marked as 61.8% Stocks Fibo Projection Level & 100% Fibo Projection Level.
Read and Draw Fibonacci Projection Levels
