How to CFD Trade With Fibonacci Projection Indicator - Fibo Projection Strategy using Fibonacci Projection Levels

What is Fibonacci Projection in CFD?

Fibo projection is drawn using 3 chart points.

To draw Fib Projection 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 Fibonacci projection example displayed below shows the 3 Chart Points where the Fibonacci projection 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 illustrated on the Fibonacci Projection Tool example shown below.

CFD Trade With Fibonacci Projection Levels? - CFD Trading Projection CFD Trading Strategy using CFD Trading Projection Levels

Please note where these CFD Trading Projection areas are plotted - Fibonacci Projection zones are drawn above the Fibonacci Technical Indicator, these are the points where the trader will set the takeprofit orders using these Fib Projection Levels - 61.80% and 100% Fibonacci Projection Areas.

Drawing Fib Projection Zones on an Upwards CFDs Trend

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

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

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

Drawing Fib Projection Zones on an Upward CFD Trend - Fibonacci Projection Strategies in CFDs Trading

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

Drawing Fibonacci Projection Areas on a Downwards CFDs Trend

Since we use this Fibonacci projection tool to estimate take profit levels, how do we draw it in a downwards CFD trend?

We draw the Fibonacci projection indicator from chart point 1 to 2 to 3 as shown below. Remember we always draw this Fibonacci projection tool in direction of the cfds trend. In the Fibonacci projection 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 Fibonacci projection above and how Fibonacci Projection is drawn below. This time you would also have used Fibonacci projection 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 Fib Projection Areas on a Downward CFD Trend - Fibonacci Projection Strategies in CFDs Trading

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