Draw Fib Projection Levels
How Do I Draw Fib Projection Levels?
Traders use Fib projection levels to estimate where the trend movement will reach. There are two commonly used Fib projection levels - 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these fibonacci projection levels are used for setting take profit levels.
To plot Fib Projection areas on the trading chart we wait til the price retracement is complete & price starts to move in original direction of the trend. Where the price retracement reaches is used as chart point 3. Fibonacci Projection Trading Indicator is drawn using Three chart points as shown and illustrated on Fibonacci projection example depicted and explained below of how to draw the Fib Projection Trading IndicatorTool.
The Fib projection example depicted and explained below portrays the Three Chart Points where the Fibonacci projection indicator is drawn, labeled as Chart point 1, Chart point 2 and Chart point 3.
Point 1 is where the market trend started, Point 2 is where the market trend pulled back and retraced & Chart point 3 is where the retracement reached as shown and illustrated on the Fib Projection Trading Indicator Tool example depicted & explained below.
Gold Draw Fibo Projection Levels - Draw Fib Projection Levels?
Please note where these Fibonacci Projection levels are plotted - Fibo Projection zones are plotted above the Fibonacci technical indicator, these are the chart points where a trader will set xauusd takeprofit orders using these fib Projection Levels - 61.8% & 100.0% Fib Projection Levels.
Drawing Fib Projection Zones on an Upwards Trend
We use Fibonacci expansion levels to try to estimate where trend move will reach. There are two commonly used Fib projection levels: 61.8%Fibonacci Projection Level and 100% Fibonacci Projection Level, these Fib Projection Levels are used for taking profit.
On the Fib projection trading indicator example depicted and explained below you can see that the Fibonacci projection technical indicator is drawn along the direction of the trend, since the trend is upwards - the Fibonacci projection levels indicator is drawn upward.
These Fibonacci projection areas are shown as horizontal lines above the Fib Projection trading technical indicator, showing profit taking areas. In the trading examples illustrated and described below if you had used 100.0% Fibonacci projection level the you would have made nice profit from this trade setup.
Drawing Fib Projection Zones Trading Indicator in an Upward Trend
From the above Fibonacci projection trading indicator example, the upward trend continued & both 61.80% and 100.00% Fibonacci projection levels were all hit after which price retraced again after getting to the 100.0% Fibonacci Projection level.
Drawing Fibo Projection Levels on a Downward Trend
Since we use the Fibonacci projection indicator tool to estimate takeprofit areas, how do we draw Fib Projection in a downwards trend?
We draw the Fib projection indicator from chart point 1 to chart point 2 to chart point Three as shown and illustrated on Fibonacci projection example depicted and explained below. Remember we always draw this Fibonacci projection tool in the direction of the market trend. In the Fibonacci projection example depicted and explained below, can you figure what direction we have drawn it? That's right - down ward direction.
Try and spot the difference between how we have plotted Fibo projection levels indicator above and how Fib Projection levels indicator is drawn below. This time you'd also have used Fibonacci projection level 100.0%, just where price reached as shown on the Fibonacci projection levels example depicted and explained below. This would have been a good takeprofit area.
Drawing Fib Projection Zones Trading Indicator in a Downward Trend
From Fibonacci projection levels indicator example above, after drawing this Fibonacci projection levels 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 price chart marked as 61.8 % Gold Trading Fib Projection Level & 100% Fibonacci Projection Level.
Draw Fib Projection Levels
