How to CFD Trade With CFD Fibonacci Extension

CFD Fibonacci Extension Trading Levels Strategies in CFD

Fib extension levels indicator is drawn using Three chart points.

To draw CFD Fibonacci Extension levels we wait until the cfds price retracement is complete & the cfds price starts to move in original direction of the CFD trend. Where the retracement reaches is used as chart point 3.

The Fib extension example illustrated and shown below shows 3 Chart Points where the Fibonacci extension indicator is drawn, marked as Chart point 1, 2 and 3. Chart point 1 is where the cfd trend started, Chart point 2 is where the cfd trend pulled back & retraced and Chart point 3 is where the cfd retracement reached as shown on the CFD Fibonacci Extension Indicator example shown below.

CFD Trade With CFD Fibonacci Extension?

Please note where these CFD Fib Extension areas are drawn - CFD Fib Extension zones are drawn above the Fibo Technical Indicator, these are the points where the trader will set the takeprofit orders using these CFD Fibo Extension Levels - 61.8% & 100% CFD Fibonacci Extension Areas.

Drawing CFD Fibonacci Extension Areas Technical Indicator on an Upward CFD Trend

We use Fibonacci extension levels to estimate where the cfd trend movement will reach. There are Two important Fibo extension levels: 61.8% and 100% CFD Fibo Extension Areas, these are used for taking profit.

On the Fibonacci extension example shown below you can see that the Fibonacci extension technical indicator is plotted along the direction of the cfd trend, since the cfd trend is upwards - the Fibonacci extension is also drawn upwards.

These Fib extension levels are displayed as horizontal lines above CFD Fibonacci Extension technical indicator, showing the profit taking areas. In the cfd example shown below if you had used of 100% Fibonacci extension you would have made nice profit from the trade set-up.

Drawing CFD Fibonacci Extension Areas Technical Indicator on an Upward CFD Trend - CFD Fibonacci Extension Indicator Levels Trading Strategies in CFDs Trading

From the above Fibonacci extension examples, the upward cfd trend continued & both 61.80% and 100.0% Fibonacci extension levels were all hit after which cfds price retraced again after getting to the 100.0 % CFD Fibonacci Extension level.

Drawing Fib Extension Levels CFDs Technical Indicator on a Downward CFDs Trend

Since we use this Fibo extension indicator to estimate take profit levels, how do we draw it in a downward trend?

We draw the Fibonacci extension indicator from chart point 1 to 2 to 3 as shown below. Remember we always draw this Fibonacci extension tool in direction of the cfds trend. In the Fibonacci extension example shown below, can you figure what direction we have drawn it? That is right - downwards direction.

Try and spot difference between how we have drawn the Fib extension above and how CFD Fibonacci Extension is drawn below. This time you would also have used Fibonacci extension level 100%, just where the cfds price reached as shown on the cfd example shown below. That would have been a nice take profit area.

Drawing CFD Fibonacci Extension Levels Technical Indicator on a Downward CFD Trend - CFD Fibonacci Extension Technical Analysis Levels Trading Strategies in CFDs Trading

From the Fibonacci extension example above, after plotting this Fibonacci extension tool there are two levels that are used to show the profit taking areas, these two Fibonacci extension levels are drawn as horizontal lines across the cfds price chart.