What is the Difference between CFDs Fibonacci Retracement & CFD Fibonacci Extension?

How to use CFDs Fibonacci Retracement & Extension and the Difference between CFDs Fibonacci Retracement & Extension

CFDs Fibonacci Retracement Areas

Fibo retracement is plotted between 2 chart points but Fib extension is drawn using 3 chart points.

CFDs Fibonacci Retracement Level example shown below where the cfd trend is heading downwards between Chart point 1 & Chart point 2, then after the Chart point 2 the cfds price retraces then it continues moving upwards in the original upwards cfds trend. Note that this CFDs Fibonacci Retracement Levels indicator is drawn from Chart point 1 to Chart point 2 in direction of the cfds trend.

CFDs Fibonacci Retracement Levels - How to Draw CFDs Fibo Retracement Levels

CFD Fibonacci Extension Levels

Fibo retracement is plotted between 2 chart points but Fib extension is drawn using 3 chart points.

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

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

CFD Fibo Extension Levels - How to Draw CFD Fibo Extension Levels

Please note where these CFD Fib Extension areas are plotted - CFD Fibo Extension levels are drawn above the CFD Fibonacci Extension indicator, these are the points where a trader will set the takeprofit orders.