How to Draw Fib Expansion IndicatorTool on Upwards Indices Trend

How Do You Draw Fib Expansion for Indices Uptrend?

We use Fibonacci Expansion zones to estimate where the trend movement will reach. There are two oftenly used Fib Expansion zones: 61.8% Indices Trading Fib Expansion Level & 100% Fibonacci Expansion Level, these Fibonacci Expansions are used for setting take profit levels.

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

These Fibo Expansion levels are shown as horizontal lines above the Fib Expansion indicator, showing profit taking areas. In the stock indices example illustrated below if you had used the 100.00% Fibonacci Expansion zone you would have made good profit from this setup.

How to Draw Fibonacci Expansion on Up Indices Trend

From the above Fibonacci Expansion indicator tool example, the upward trend continued and both 61.8% and 100.00% Fibonacci Expansion zones were all hit after which the stock indices trading price retraced again after getting to the 100.0% Fibonacci Expansion zone.

From the Fibonacci Expansion indicator tool example above, after plotting this Fibonacci Expansion tool there are two levels that are used to show the profit taking areas, these two Fibonacci Expansion zones are plotted as horizontal lines across the stock indices chart marked as 61.8 % Indices Trading Fib Expansion Level and 100% Fibonacci Expansion Level.

Explanation of How to Draw Fib Expansions on Stock Indices Charts

We use Fibonacci Expansion zones to estimate where the trend movement will reach. There are two important Fib Expansion levels: 61.8% & 100% Fibonacci Expansions, these are used for taking profit.

To draw Fib Expansion zones on the stock indices chart we wait until the stock indices trading price retracement is complete & stock indices trading price starts to move in original direction of the Indices trend. Where the stock indices price retracement reaches is used as chart point 3. Fibonacci Expansion Indicator is plotted using three chart points as displayed on the stock indices example explained below of how to plot the Fib Expansion IndicatorTool.

The Fib Expansion examples illustrated below shows the Three Chart Points where the Fib Expansion indicator tool is drawn, marked as Chart point 1, Chart point two and Chart point 3.

Chart point 1 is where the indices trend started, Chart point 2 is where the indices trend pulled back and retraced and Chart point 3 is where the stock indices retracement reached as displayed on the Fib Expansion Indicator Tool example explained below.

How to Draw Fibonacci Expansion IndicatorTool on Upwards Indices Trend

Please note where these Fib Expansion zones are plotted - Fibonacci Expansion levels are drawn above the Fib indicator, these are the chart points where a trader will place take profit orders using these Fibonacci Expansions - 61.8% and 100.00% Fibonacci Expansion Levels.