Fib Extension Trading Indicator Tutorial
We use Fibonacci Extension Areas to estimate where the market trend movement will reach. There are 2 important Fibonacci Extension areas: 61.80% and 100% Fibonacci Extension Levels, these are used for taking profit.
To draw Fibo Extension levels on the MetaTrader 4 stock indices chart we wait until the stock indices price retracement is complete and the stock indices price starts to move in original direction of the Indices trend. Where the stock indices price retracement reaches is used as chart point 3. Fibo Extension MT4 Indicator is plotted using three chart points as illustrated on the stock indices trading examples explained below of how to plot the Fibo Extension Technical Indicator MT4 Tool.
The Fibo Extension MetaTrader 4 Indicator example explained below shows the Three Chart Points where the Fibonacci Extension MT4 technical indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the indices trend started, Chart point 2 is where the indices trend pulled back and retraced & Chart point 3 is where the stock indices retracement reached as displayed on the Fibo Extension MT4 Indicator Tool examples explained below.
Fibonacci Extension Stock Indices Indicator Guide - Fibonacci Extension Levels Guide
Fibonacci Extension Stock Indices Indicator Guide - Fibonacci Extension Levels Guide
Please note where these Fibonacci Extension areas are plotted - Fibo Extension zones are drawn above the MetaTrader 4 Fibonacci indicator, these are the chart points where one will set takeprofit orders using these Fib Extension Levels - 61.80% and 100.00% Fibonacci Extension Areas.
Upward Indices Trend - Fib Extension Indices Trading Lesson - Fibo Extension Stock Indices Indicator Guide - Fibonacci Extension Levels Tutorial
We use Fibonacci Extension Areas to estimate where the market trend movement will reach. There are 2 important Fib Extension areas: 61.80% Stock Indices Fibonacci Extension Level and 100% Fibonacci Extension Level, these Fib Extension Levels are used for taking profit.
On the Fibonacci Extension MetaTrader 4 indicator example explained and illustrated below you can see that the Fibo Extension MT4 stock technical indicator tool is plotted along the direction of the trend, since the trend is upward - the MetaTrader 4 Fibonacci Extension technical indicator is plotted upwards.
These Fibonacci Extension levels are displayed as horizontal lines above the Fib Extension MetaTrader 4 technical indicator, showing profit taking areas. In the stock indices examples explained below if you had used the 100.00% Fib Extension level the you would have made good profit from the trade set-up.
Fibonacci Extension Stock Indices Indicator Guide - Fibonacci Extension Levels Guide
Fib Extension Indices Tutorial - Fibonacci Extension Stock Indices Technical Indicator Guide
From the above Fib Extension MT4 indicator example, upward trend continued and both 61.8% & 100.00% Fibo Extension levels were all hit after which stock indices price retraced again after getting to the 100.00% Fibo Extension level.
Fibonacci Extension Stock Indices Technical Indicator Guide
Since we use the Fibo Extension MT4 stock indicator tool to estimate take profit levels, how do we draw MetaTrader 4 Fibonacci Extension in a downward Indices trend?
We draw the Fibo Extension MT4 stock tool from chart point 1 to chart point 2 to chart point 3 as illustrated on the stock indices trading examples explained below. Remember we always plot this Fibo Extension MT4 stock technical indicator tool in direction of the market trend. In the Fibonacci Extension example explained and illustrated below, can you figure what's the direction which we have plotted it? That's right - downward direction.
Try and identify the difference between how we have drawn Fibo Extension indicator above and how Fibo Extension technical indicator is plotted below. This time you would also have used Fibonacci Extension level 100.00%, just where the stock indices price reached as illustrated on the stock indices example explained below. That would have been a good level for profit taking.
Fibonacci Extension Stock Indices Indicator Guide - Fibonacci Extension Levels Guide
Fibonacci Extension Stock Indices Guide - Fib Extension Technical Indicator Guide
From the Fibo Extension MT4 indicator examples above, after plotting this MT4 Fibo Extension tool there are 2 levels that are used to show the profit taking areas, these 2 Fibo Extension levels are plotted as horizontal lines across the stock indices price trading chart marked as 61.8% Indices Fibo Extension Level and 100% Fibonacci Extension Level.
