How to Draw Bitcoin Fibonacci Expansion
How Do I Use Fibo Extension Levels on Bitcoin Chart?
We use Fibo Expansion areas to try to estimate where btcusd crypto trend movement will get to. There are Two crucial Fib Expansion areas: 61.80% & 100% Fibo Expansion Areas, these are used for taking profit.
To draw Fibonacci Expansion levels on the chart we wait til the btcusd crypto price retracement is complete & the bitcoin crypto currency price starts to move in the original direction of the Bitcoin Crypto Currency trend. Where the bitcoin crypto price pullback gets-to is used as point 3. Fibo Expansion Technical Indicator is plotted using 3 chart points as shown on the example illustrated below of how to draw the Fibo Expansion Technical IndicatorTool.
The Fib Expansion example shown below shows the 3 Chart Points where the Fib Expansion technical indicator is plotted, labeled as Point 1, Chart point two and Chart point 3.
Point 1 is where btcusd crypto trend started, Point 2 is where btcusd crypto trend pulled back and retraced & Chart point 3 is where the retracement reached as shown on the Fibonacci Expansion Indicator Tool example shown below.
How Do You Trade with Fib Expansion? - How to Draw Fib Extension Levels on Bitcoin Charts
Please note where these Fibo Expansion levels are plotted - Fib Expansion levels are drawn above the Fib indicator, these are the chart areas where a trader will set the takeprofit orders using these Fibo Extension Levels - 61.80% & 100.00% Fibo Expansion Areas.
Drawing Fibonacci Expansions on an Upwards BTCUSD Trend
We use Fib Expansion areas to try to estimate where bitcoin crypto currency trend movement will get to. There are Two crucial Fibo Expansion areas: 61.8% Bitcoin Fibo Expansion Level & 100% Fib Expansion Level, these Fibo Extension Levels are used for taking profit.
On the Fibo Expansion indicator example illustrated below you can see that the Fibo Expansion technical indicator tool is plotted along the direction of the btcusd crypto trend, since the bitcoin trend is upward - the Fibo Expansion indicator is drawn upward.
These Fibo Expansion areas are shown as horizontal lines above the Fibo Expansion technical indicator, showing profit booking zones. In the example illustrated below if you had used of 100.0% Fibo Expansion level you would have made a good profit from the trade set-up.
Drawing Fibonacci Expansion Indicator on an Upwards Bitcoin Trend - Fibo Expansion Tool
From the above Fib Expansion indicator example, the upward bitcoin trend continued & both 61.80% & 100.0% Fibo Expansion areas were all hit after which bitcoin price retraced again after getting to the 100.00% Fibo Expansion level.
Drawing Fibo Expansion Areas on a Downward BTCUSD Trend
Since we use the Fibo Expansion indicator tool to estimate take-profit levels, how do we draw Fib Expansion in a downward trend?
We draw the Fib Expansion indicator tool from chart point 1 to chart point 2 to chart point 3 as shown on the example illustrated below. Remember we always draw this Fib Expansion tool in direction of the trend. In the Fib Expansion example illustrated below, can you figure what is the direction which we have drawn it? That's right - downwards direction.
Try and identify the difference between how we have plotted Fibo Expansion indicator above and how Fibonacci Expansion indicator is drawn below. This time you'd also have used Fibo Expansion level 100.0 %, just where the btcusd crypto price reached as shown on the example illustrated below. That would have been a nice take profit level.
Drawing Fibonacci Expansion Indicator on a Downwards Bitcoin Trend - Fibo Expansion Tool
From the Fibo Expansion indicator example above, after drawing this Fibonacci Expansion tool there are two levels that are used to show the taking profit zones, these two Fibo Expansion levels are plotted as horizontal lines across the bitcoin price chart marked as 61.80% BTCUSD Fibo Expansion Level & 100% Fibo Expansion Level.
