How to Draw Stocks Fib Expansion

How Do I Use Fibonacci Expansion Levels on Stocks Chart?

We use Stocks Fibonacci Expansion levels to estimate where the trend movement will reach. There are Two important Stocks Fibo Expansion levels: 61.8% & 100% Stocks Fibonacci Expansion Levels, these are used for taking profit.

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 the original direction of the Stocks trend. Where the stocks price retracement reaches is used as chart point 3. Stocks Fibo Expansion Technical Indicator is plotted using three chart points as displayed on the stocks example illustrated and explained below of how to plot the Stocks Fib Expansion Technical Indicator Tool.

The Stocks Fibonacci Expansion example illustrated and explained below shows the 3 Chart Points where the Stocks Fibonacci Expansion indicator is drawn, marked as Chart point 1, Chart point 2 and Chart point 3.

Chart point 1 is where the stocks trend started, Chart point 2 is where the stocks trend pulled back and retraced & Chart point 3 is where the stocks retracement reached as displayed on the Stocks Fibonacci Expansion Technical Indicator Tool example illustrated & explained below.

How to Trade With Stock Fibonacci Expansion - How to Draw Fibonacci Expansion Levels on Stocks Charts

Please note where these Stocks Fib Expansion levels are plotted - Stocks Fibonacci Expansion levels are plotted above the Fib technical indicator, these are chart points where a trader will place the take profit orders using these Stocks Fibonacci Expansion Levels - 61.80% and 100.00% Stocks Fibonacci Expansion Levels.

Drawing Stocks Fib Expansion Levels on an Upward Stocks Trend

We use Stocks Fibonacci Expansion levels to estimate where the trend movement will reach. There are Two important Stocks Fibonacci Expansion levels: 61.8%Stocks Fibonacci Expansion Level & 100% Stocks Fibonacci Expansion Level, these Stocks Fibonacci Expansion Levels are used for taking profit.

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

These Stocks Fibonacci Expansion levels are shown as horizontal lines above the Stocks Fibo Expansion indicator, showing profit-taking areas. In the stocks example illustrated and explained below if you had used of 100.0% Stocks Fibo Expansion level you would have made nice profit from the trade set-up.

Drawing Stocks Fibonacci Expansion Indicator on an Upwards Stocks Trend - Stocks Fibonacci Expansion Tool

From the above Stocks Fibonacci Expansion indicator examples, the upwards trend continued & both 61.80% and 100.00% Stocks Fibonacci Expansion levels were all hit after which stocks price retraced again after getting to the 100.00% Stocks Fibonacci Expansion level.

Drawing Fibonacci Expansion Areas on a Downward Stock Trend

Since we use the Stocks Fibonacci Expansion indicator tool to estimate take profit levels, how do we draw Fibonacci Expansion in a downward Stocks trend?

We draw the Stocks Fibonacci Expansion indicator from chart point 1 to chart point 2 to chart point 3 as displayed on the stocks example illustrated and explained below. Remember we always draw this Stocks Fibonacci Expansion tool in direction of the market trend. In the Stocks Fibonacci Expansion example illustrated and explained below, can you figure what direction we have drawn it? That's right - downward direction.

Try and identify the difference between how we have plotted Stocks Fibonacci Expansion indicator above and how Stocks Fibonacci Expansion indicator is drawn below. This time you would also have used Stocks Fibonacci Expansion level 100.0%, just where the price reached as shown on the stocks example illustrated and explained below. That would have been a good take profit area.

Drawing Stocks Fibonacci Expansion Indicator on a Downward Stocks Trend - Stocks Fibonacci Expansion Tool

From the Stocks Fibonacci Expansion indicator example above, after plotting this Stocks Fibonacci Expansion tool there are 2 levels that are used to show the profit taking areas, these two Stocks Fibonacci Expansion levels are plotted as horizontal lines across the stocks price chart marked as 61.8%Stocks Fibonacci Expansion Level & 100% Stocks Fibonacci Expansion Level.