How to Draw Fibonacci Extension Technical IndicatorTool on Upwards Indices Trend
How Do You Draw Fibonacci Extension for Indices Uptrend?
We use Fibo Extension Levels to estimate where the trend movement will reach. There are two commonly used Fibo Extension areas: 61.80% Indices Fibo Extension Level and 100% Fibo Extension Level, these Fib Extension Levels are used for setting take profit areas.
On the Fibo Extension indicator example explained below you can see that the Fibo Extension indicator tool is plotted along the direction of the trend, since the trend is up - the Fibo Extension indicator is plotted upwards.
These Fibo Extension levels are displayed as horizontal lines above the Fib Extension indicator, showing the profit taking areas. In the stock indices example explained below if you had used 100.00% Fib Extension level you would have made good profit from this trade setup.
How to Draw Fibo Extension on Up Indices Trend
From the above Fibo Extension indicator tool example, the upward trend continued and both 61.8% & 100.00% Fibo Extension levels were all hit after which the stock indices price retraced again after getting to the 100.00% Fibo Extension zone.
From the Fibo Extension tool example above, after plotting this Fibo Extension tool there are two levels that are used to show the profit taking areas, these 2 Fibo Extension levels are plotted as horizontal lines across the stock indices chart marked as 61.8% Indices Fibo Extension Level and 100% Fibo Extension Level.
Explanation of How to Draw Fibonacci Expansion Levels on Stock Indices Charts
We use Fibo Extension Areas to estimate where the market trend movement will reach. There are two important Fibo Extension areas: 61.80% and 100% Fibo Expansion Levels, these are used for taking profit.
To draw Fibonacci Extension zones on the stock indices chart we wait until the stock indices price retracement is complete & 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 Indicator is plotted using 3 chart points as illustrated on the stock indices example explained below of how to plot the Fib Extension Technical IndicatorTool.
The Fib Extension example explained below shows the 3 Chart Points where the Fibo Extension indicator is plotted, marked as Chart point 1, Chart point two & Chart point 3.
Chart point 1 is where the indices trend started, Chart point 2 is where the indices trend pulled back & retraced & Chart point 3 is where the stock indices retracement reached as pictured on the Fib Extension Indicator Tool examples explained below.
How to Draw Fibo Extension Technical IndicatorTool on Upwards Indices Trend
Please note where these Fibo Extension areas are plotted - Fibo Extension zones are drawn above the Fibonacci indicator, these are the chart points where one will set takeprofit orders using these Fibo Extensions - 61.80% and 100.00% Fibo Extension Areas.