How Do You Interpret Commodity Fibonacci Extension Levels in Commodity Trading?
How Do I Trade Commodity Fibonacci Extension Levels in Commodity Trading?
Fibonacci extension levels indicator is drawn using Three chart points.
To draw Commodity Trading Fib Extension levels we wait until the commodity price retracement is complete & the price starts to move in the original direction of the Commodity Trading trend. Where the commodity price retracement reaches is used as chart point 3.
The Fibonacci extension commodities trading example displayed below shows the 3 Commodity Trading Chart Points where the Fibo extension technical indicator is drawn, marked as Commodity Trade Chart point 1, 2 & 3. Commodity Chart point 1 is where the commodity trend started, Commodity Chart point 2 is where the commodity trend pulled back & retraced and Commodity Chart point 3 is where the price retracement reached as shown on the Commodity Trading Fibo Extension Technical Indicator commodities trading example shown below.
Commodity Trading Fib Extension Strategy using Commodity Fibo Extension Levels
Please note where these Commodity Trading Fib Extension areas are plotted - Commodity Trading Fib Extension levels are drawn above the Fibonacci Commodity Trading Technical Indicator, these are points where the trader will set the commodity take-profit orders using these Commodity Trading Fib Extension Levels - 61.8% & 100% Commodity Trading Fib Extension Areas.
Drawing Commodities Fib Extension Levels on an Upward Commodities Trading Trend
We use Fib extension levels to estimate where the trend movement will reach. There are Two important Fib extension levels: 61.8% & 100% Commodity Trading Fib Extension Areas, these are used for taking profit.
On the Fibonacci extension commodities trading example shown below you can see that the Fibonacci extension technical indicator is plotted along the direction of the trend, since the trend is upward - the Fibonacci extension indicator is also drawn upwards.
These Fibo extension levels are displayed as horizontal lines above the Commodity Trading Fib Extension technical indicator, showing the profit taking areas. In the commodities trading example shown below if you had used of 100% Fibonacci extension you would have made nice profit from the commodity trade setup.
Drawing Commodity Fib Extension Levels on an Upwards Commodity Trend - Commodity Trading Fib Extension Strategies in Commodity Trading
From the above Fibonacci extension commodity trading examples, the upward trend continued and both 61.8% & 100.00% Fibonacci extension levels were all hit after which commodity price retraced again after hitting the 100.0 % Commodity Fibonacci Extension level.
Drawing Commodity Trading Fib Extension Areas on a Downward Commodity Trading Trend
Since we use this Fibonacci extension indicator tool to estimate commodity take profit levels, how do we draw it in a downwards trend?
We draw the Fibonacci extension indicator from chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibonacci extension tool in direction of the trend. In the Fibonacci extension commodities trading example shown below, can you figure what direction we have drawn it? That is right - downwards direction on the commodities trading chart.
Try & identify the difference between how we have plotted the Fibo extension above and how Commodity Trading Fib Extension is drawn below. This time you would also have used Fibonacci extension level 100%, just where the price reached as illustrated on the commodities trading example shown below. That would have been a nice commodity take profit area.
Commodity Trading Fib Extension Strategies in Commodity Trading
From the Fibonacci extension commodities trading example above, after plotting this Fibonacci extension tool there are 2 levels that are used to show the commodity profit taking areas, these two Fibonacci extension levels are drawn as horizontal lines across the commodity price chart.
How Do I Trade Commodity Fibonacci Extension Levels in Commodity Trading
