What's the Difference between Crypto Fibo Retracement and BTCUSD Crypto Fibonacci Extension?
How to use Fibo Retracement and Extension and the Difference between Fibo Retracement and Extension
BTCUSD Trading Fib Retracement Areas
Fib retracement is drawn between 2 chart points but Fib extension is plotted using Three chart points.
Fibonacci Retracement Level example illustrated below where the bitcoin trend is moving downwards between Chart point 1 & Chart point 2, then after the Chart point 2 the bitcoin trading price retraces then it continues heading upwards in the original upwards cryptocurrency trend. Note that this Fibonacci Retracement Levels indicator is drawn from Chart point 1 to Chart point 2 in direction of the market trend.
Fibo Retracement Levels - How to Draw Fibo Retracement Levels
Fibonacci Extension Levels
Fib retracement is drawn between 2 chart points but Fib extension is plotted using Three chart points.
To draw these Fibo Extension 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 for Fib extension.
The Fibonacci Extension example illustrated below shows the 3 chart Points where the Fibo Extension technical indicator is drawn, marked as chart point 1, 2 & 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 retracement reached as shown on Fibonacci Extension example illustrated below.
Fibo Extension Levels - How to Draw Fibo Extension Levels
Please note where these Fibo Extension areas are plotted - Fibo Extension levels are drawn above the Fibo Extension indicator, these are the points where a trader will set the takeprofit orders.
