How to Draw CFD Fib Extension on Downward CFD Trend

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

We draw the CFD Fibonacci Extension indicator tool from chart point 1 to chart point 2 to chart point 3 as illustrated on the cfd examples illustrated below. Remember we always draw this CFD Fibonacci Extension tool in direction of the cfds trend. In the CFD Fibonacci Extension example shown below, can you figure what direction we have drawn it? That's right - downward direction.

As a trader you would also have used CFD Fibonacci Extension level 100.0%, just where the cfds price reached as shown on the CFD Fibonacci Extension example shown below. That would have been a good take profit area.

How to Draw CFD Fib Extension on Downward CFD Trend - How to Draw CFD Fibonacci Extension on Down CFD Trend

From the CFD Fibo Extension indicator tool examples above, after plotting this CFD Fibonacci Extension indicator tool there are two levels that are used to show the profit taking levels, these two CFD Fibo Extension areas are drawn as horizontal lines across the cfds chart marked as 61.8%CFD Fibonacci Extension Level & 100% CFD Fib Extension Level.

Explanation of How to Draw CFD Fibonacci Extension Areas Technical Indicator on CFDs Charts

We use CFD Fibonacci Extension Levels to estimate where the cfd trend movement will reach. There are 2 oftenly used CFD Fibonacci Extension levels: 61.80% CFD Fibonacci Extension Level and 100% CFD Fibonacci Extension Levels, these are used for setting taking profit levels.

To draw CFD Fibonacci Extension levels on the cfds chart we wait until the cfds price retracement is complete & the cfds price starts to move in original direction of the CFD trend. Where the cfds price retracement reaches is used as chart point 3. CFD Fibonacci Extension Indicator tool is drawn using three chart points as shown on the cfd example displayed below of how to plot the CFD Fibonacci Extension Technical Indicator Tool.

The CFD Fibonacci Extension examples displayed below shows the Three Chart Points where the CFD Fibonacci Extension technical indicator is plotted, marked as Chart point 1, Chart point 2 and Chart point 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 Technical Indicator Tool example shown below.

How to Draw CFDs Trading Fib Extension Technical Indicator on Downwards CFD Trend

Please note where these CFD Fib Extension areas are drawn - CFD Fib Extension zones are drawn above the Fibo indicator, these are the chart points where a trader will set the takeprofit orders using these CFD Fibo Extension Levels - 61.8% CFD Fibonacci Extension Level and 100.0% CFD Fib Extension Level.