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