Fibonacci Expansion Strategy using Fibonacci Expansion Levels
Fibo expansion is drawn using Three chart points.
To draw Fibonacci Expansion levels we wait until the bitcoin price retracement is complete and the bitcoin price starts to move in the original direction of the Bitcoin trend. Where the retracement reaches is used as chart point 3.
The Fibonacci expansion example illustrated below shows the 3 Chart Points where the Fibonacci expansion technical indicator is drawn, marked as Chart point 1, 2 and 3. Chart point 1 is where the bitcoin trend started, Chart point 2 is where the bitcoin trend pulled back & retraced & Chart point 3 is where the cryptocurrency retracement reached as shown on the Fibonacci Expansion Tool example illustrated below.
Fibo Expansion Strategy using Fibo Expansion Areas
Please note where these Fibonacci Expansion levels are plotted - Fibo Expansion levels are drawn above the Fibonacci Technical Indicator, these are points where the trader will set the takeprofit orders using these Fibo Expansion Levels - 61.80% & 100% Fibo Expansion Areas.
Drawing Fib Expansion Levels on an Upward BTCUSD Trend
We use Fibo expansion areas to estimate where the bitcoin trend movement will reach. There are Two important Fib expansion areas: 61.8% & 100% Fibo Expansion Areas, these are used for taking profit.
On the Fibonacci expansion example illustrated below you can see that the Fibonacci expansion technical indicator is plotted along the direction of the bitcoin trend, since the bitcoin trend is upward - the Fibonacci expansion is drawn upwards.
These Fibo expansion levels are displayed as horizontal lines above the Fibo Expansion technical indicator, showing profit taking areas. In the cryptocurrency trading example illustrated below if you had used of 100% Fibonacci expansion you would have made nice profit from the trade set-up.
Drawing Fibonacci Expansion Levels on an Upward Bitcoin Trend - Fibonacci Expansion Strategies in Bitcoin Trading
From the above Fibonacci expansion examples, the upward bitcoin trend continued & both 61.80% & 100.0% Fibonacci expansion levels were all hit after which bitcoin trading price retraced again after hitting the 100.0 % Fibonacci Expansion level.
Drawing Fibo Expansion Areas on a Downwards Bitcoin Trend
Since we use this Fibonacci expansion tool to estimate take profit levels, how do we draw it in a downward Crypto trend?
We draw the Fibonacci expansion indicator from chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibonacci expansion tool in direction of the cryptocurrency trend. In the Fibonacci expansion example illustrated below, can you figure what direction we have drawn it? That is right - downwards direction.
Try & identify the difference between how we have plotted Fibonacci expansion above and how Fibonacci Expansion is drawn below. This time you would also have used Fibonacci expansion level 100%, just where the bitcoin price reached as shown on the cryptocurrency trading example illustrated below. That would have been a nice take profit area.
Fibonacci Expansion Strategies in Crypto Trading
From Fibonacci expansion examples above, after plotting this Fibonacci expansion tool there are two levels that are used to show the profit taking areas, these 2 Fibo expansion levels are drawn as horizontal lines across the bitcoin trading price chart.
