How to Draw Fibonacci Projection Stock Indices Indicator Tool on Downwards Indices Trend
Indices Draw Fibo Projection for Indices Downtrend
We draw the Fibo Projection tool from chart point 1 to chart point 2 to chart point Three as shown on stock indices trading examples explained below. Remember we always plot this Fibo Projection tool in direction of the trend. In the Fibonacci Projection examples explained below, can you figureout what's the direction which we have plotted it? That's right - downwards direction.
As a trader you would also have used Fibonacci Projection level 100.0%, just where the stock indices price reached as illustrated on the Fibonacci Projection example explained and illustrated below. That would have been a good take profit area.
How to Draw Indices Trading Fibonacci Projection on Downward Indices Trend - How to Draw Fibonacci Projection on Down Indices 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 plotted as horizontal lines across the stock indices chart marked as 61.80%Fibonacci Projection Level & 100% Fibo Projection Level.
Explanation of How to Draw Fibonacci Projection Levels on Indices Charts
We use Fibo Projection levels to estimate where the trend movement will reach. There are 2 commonly used Fibonacci Projection levels: 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these are used for setting taking profit levels.
To draw Fibo Projection levels on 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. Fibonacci Projection Indicator tool is drawn using three chart points as shown on the stock indices example explained below of how to plot the Fibonacci Projection Technical Indicator Tool.
The Fibonacci Projection examples explained below shows the Three Chart Points where the Fibonacci Projection technical indicator is plotted, marked as Chart point 1, Chart point 2 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 & Chart point 3 is where the stock indices retracement reached as shown on the Fibo Projection Technical Indicator Tool example explained below.
How to Draw Fib Projection Stock Indices Indicator Tool on Downwards Indices Trend
Please note where these Fibonacci Projection areas are drawn - Fibo Projection areas are plotted above Fibo indicator, these are the chart points where one will set takeprofit orders using these Fibonacci Projection Levels - 61.8% Fibonacci Projection Level and 100.0% Fibonacci Projection Level.
