How to Draw Fibonacci Bitcoin Trading Projection Indicator
How Do I Use Fibo Projection Levels on Bitcoin Chart?
We use Fibo Projection levels to estimate where the bitcoin trend movement will reach. There are 2 important Fib Projection levels: 61.8% & 100% Fib Projection Areas, these are used for taking profit.
To draw Fib Projection levels on the cryptocurrency chart 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 bitcoin price retracement reaches is used as chart point 3. Fib Projection Technical Indicator is plotted using 3 chart points as shown on the cryptocurrency trading example illustrated below of how to draw the Fibonacci Projection Indicator Tool.
The Fibonacci Projection example illustrated below shows the 3 Chart Points where the Fibonacci Projection indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 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 Technical Indicator Tool example illustrated below.
How to Trade with Fibonacci Projection? - How to Draw Fibonacci Projection Levels on Bitcoin Charts
Please note where these Fibonacci Projection areas are drawn - Fib Projection levels are plotted above the Fibo indicator, these are the chart points where a trader will place the takeprofit orders using these Fib Projection Levels - 61.80% & 100.00% 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%Fibonacci Projection Level and 100% Fibonacci Projection Level, these Fibonacci Projection Levels are used for taking profit.
On the Fibonacci Projection technical indicator 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 upward - the Fibonacci Projection technical indicator is drawn upwards.
These Fibonacci Projection levels are displayed as horizontal lines above the Fibo Projection technical indicator, showing the profit-taking areas. In the cryptocurrency trading example illustrated below if you had used of 100.0% Fibonacci Projection level you would have made nice profit from the trade set-up.
Drawing Fibo Projection Indicator on an Upward Bitcoin Trend - Fib Projection Trading Tool
From the above Fibonacci Projection technical indicator examples, the upwards bitcoin trend continued & both 61.80% & 100.0% Fibonacci Projection levels were all hit after which bitcoin price retraced again after getting to the 100.0% Fibo Projection level.
Drawing Fibo Projection Areas on a Downward Bitcoin Trend
Since we use the Fibonacci Projection technical indicator to estimate take profit levels, how do we draw Fibo Projection in a downward Crypto trend?
We draw the Fibonacci Projection tool from chart point 1 to chart point 2 to chart point Three as shown on cryptocurrency trading example illustrated 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's the direction which we have drawn it? That's right - downwards direction.
Try & identify the difference between how we have drawn Fibonacci Projection technical indicator above and how Fibonacci Projection technical indicator is drawn below. This time you would also have used Fibonacci Projection level 100.0%, just where the bitcoin price reached as illustrated on the cryptocurrency trading example illustrated below. That would have been a good take profit area.
Drawing Fibo Projection Indicator on a Downward Bitcoin Trend - Fib Projection Trading Tool
From the Fibonacci Projection technical indicator 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 areas are drawn as horizontal lines across the bitcoin price trading chart marked as 61.80%Fibo Projection Level & 100% Fibo Projection Level.
