How to Draw Stocks Fib Extension on Downward Stocks Trend
Drawing Stocks Fib Extension Levels on a Downward Stocks Trend
We draw the Stocks Fibonacci Extension tool from chart point 1 to chart point 2 to chart point 3 as shown on the stocks example illustrated and explained below. Remember we always draw this Stocks Fibonacci Extension tool in direction of the trend. In the Stocks Fibonacci Extension example illustrated and explained below, can you figure what direction we have drawn it? That's right - downward direction.
As a trader you would also have used Stocks Fibo Extension level 100.00%, just where the price reached as shown on the Stocks Fibonacci Extension example illustrated and explained below. That would have been a good take profit area.
How to Draw Stocks Fib Extension on Downward Stocks Trend - How to Draw Fibonacci Extension on Down Stocks Trend
From the Stocks Fibo Extension tool examples above, after plotting this Stocks Fibonacci Extension indicator tool there are two levels that are used to show the profit taking levels, these two Stocks Fibo Extension levels are drawn as horizontal lines across the stock chart marked as 61.8%Stocks Fibo Extension Level & 100% Stocks Fib Extension Level.
Explanation of How to Draw Stock Fib Extension Levels on Stocks Charts
We use Stocks Fibo Extension Zones to estimate where the trend movement will reach. There are 2 oftenly used Stocks Fibo Extension levels: 61.8% Stocks Fibonacci Extension Level and 100% Stocks Fibonacci Extension Levels, these are used for setting taking profit levels.
To draw Stocks Fibonacci Extension 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 Stocks trend. Where the stocks price retracement reaches is used as chart point 3. Stocks Fibonacci Extension Indicator tool is drawn using three chart points as shown on the stocks example illustrated and explained below of how to plot the Stocks Fibo Extension Technical Indicator Tool.
The Stocks Fibonacci Extension example illustrated and explained below shows the 3 Chart Points where the Stocks Fibonacci Extension indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the stocks trend started, Chart point 2 is where the stocks trend pulled back & retraced & Chart point 3 is where the stocks retracement reached as shown on the Stocks Fibonacci Extension Technical Indicator Tool examples illustrated & described below.
How to Draw Fibonacci Extension Stock Indicator Tool on Downwards Stocks Trend
Please note where these Stocks Fib Extension areas are drawn - Stocks Fib Extension zones are plotted above the Fibonacci technical indicator, these are chart points where a trader will place the take profit orders using these Stocks Fibo Extension Levels - 61.8% Stocks Fibonacci Extension Level and 100.0% Stocks Fib Extension Level.
