How to Draw Stock Trading Fib Extension on Downward Stock Trading Trend
Drawing Stock Trading Fibonacci Extension Levels Technical Indicator on a Downward Stock Trend
We draw the Stock Trading Fibo Extension tool from chart point 1 to chart point 2 to chart point 3 as illustrated and shown on stocks trading examples illustrated and described below. Remember we always draw this Stock Trading Fibonacci Extension tool in direction of the stocks trend. In the Stock Fibo Extension example illustrated and described below, can you figure-out what direction we have drawn it? That's right - downward direction.
As a trader you would also have used Stock Trading Fibonacci Extension level 100.0%, just where the stocks price reached as illustrated on the Stock Trading Fibonacci Extension example illustrated and explained below. That would have been a good take profit area.
How to Draw Stock Trading Fib Extension on Downward Stock Trading Trend
From the Stock Trading Fibo Extension indicator tool example above, after plotting this Stock Trading Fibonacci Extension indicator tool there are two levels that are used to show the profit taking levels, these two Stock Trading Fibo Extension areas are drawn as horizontal lines across the stock chart marked as 61.8% Stocks Fibonacci Extension Level & 100% Stock Fib Extension Level.
Explanation of How to Draw Stocks Trading Fib Extension Levels on Stocks Charts
We use Stock Fibonacci Extension Zones to estimate where the stock trend movement will reach. There are 2 oftenly used Stock Fibonacci Extension levels: 61.8% Stock Trading Fibo Extension Level and 100% Stock Trading Fibonacci Extension Levels, these are used for setting taking profit levels.
To draw Stock Trading Fibo Extension levels on stock chart we wait until the stocks price retracement is complete and the stocks price starts to move in the original direction of the Stock trend. Where the stocks price retracement reaches is used as chart point 3. Stock Trading Fibonacci Extension Indicator tool is drawn using three chart points as shown on the stocks trading example illustrated & explained below of how to plot the Stock Fib Extension Technical Indicator.
The Stock Trading Fibonacci Extension example illustrated and explained below shows the 3 Chart Points where the Stock Trading Fibonacci Extension indicator is drawn, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the stock trend started, Chart point 2 is where the stock trend pulled back & retraced and Chart point 3 is where the stock retracement reached as displayed on the Stock Trading Fibo Extension Technical Indicator Tool example illustrated & explained below.
How to Draw Stock Trading Fibonacci Extension Technical Indicator on Downwards Stock Trading Trend
Please note where these Stock Trading Fibo Extension areas are drawn - Stock Trading Fibo Extension areas are plotted above Fibonacci indicator, these are the chart points where a trader will place the takeprofit orders using these Stock Trading Fibo Extension Levels - 61.8% Stock Trading Fibo Extension Level & 100.0% Stock Fib Extension Level.
