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