Commodity Trading Fib Expansion Strategy using Commodity Trading Fib Expansion Levels

Fibo expansion is drawn using 3 chart points.

To draw Commodity Trading Fib Expansion 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 retracement reaches is used as chart point 3.

The Fibo expansion example illustrated and displayed below shows the Three Chart Points where the Fibo expansion technical indicator is drawn, marked as Chart point 1, 2 and 3. Chart point 1 is where the commodity trend started, Chart point 2 is where the commodity trend pulled back & retraced and Chart point 3 is where the commodity retracement reached as displayed on the Commodity Trading Fibonacci Expansion Tool example shown below.

Commodity Trading Fib Expansion Strategy using Commodity Fibo Expansion Areas

Please note where these Commodity Trading Fib Expansion levels are plotted - Commodity Trading Fib Expansion levels are drawn above the Fibonacci Technical Indicator, these are points where the trader will set the takeprofit orders using these Commodity Trading Fib Expansion Levels - 61.8% & 100% Commodity Fibo Expansion Areas.

Drawing Commodities Trading Fibonacci Expansion Levels on an Upwards Commodity Trading Trend

We use Fib expansion areas to estimate where the trend movement will reach. There are Two important Fib expansion areas: 61.8% & 100% Commodity Trading Fib Expansion Areas, these are used for taking profit.

On the Fibonacci expansion example shown below you can see that the Fibonacci expansion technical indicator is plotted along the direction of the trend, since the trend is upward - the Fibonacci expansion is drawn upwards.

These Fibo expansion levels are displayed as horizontal lines above the Commodity Trading Fib Expansion technical indicator, showing profit taking areas. In the commodities trading example shown below if you had used of 100% Fibonacci expansion you would have made nice profit from the trade set-up.

Drawing Commodity Trading Fibonacci Expansion Levels on an Upwards Commodity Trend - Commodity Trading Fib Expansion Strategies in Commodity Trading

From the above Fibonacci expansion examples, the upward trend continued and both 61.8% & 100.00% Fibonacci expansion levels were all hit after which commodity price retraced again after hitting the 100.0 % Commodity Trading Fibo Expansion level.

Drawing Commodities Trading Fibonacci Expansion Areas on a Downwards Commodities Trading Trend

Since we use this Fibonacci expansion tool to estimate take profit levels, how do we draw it in a downwards Commodity Trading trend?

We draw the Fibonacci expansion indicator from chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibo expansion tool in direction of the trend. In the Fibonacci expansion example shown below, can you figure what direction we have drawn it? That is right - downwards direction.

Try & spot difference between how we have drawn Fibonacci expansion above and how Commodity Trading Fibonacci Expansion is drawn below. This time you would also have used Fibonacci expansion level 100%, just where the price reached as illustrated on the commodities trading example shown below. That would have been a nice take profit area.

Commodity Trading Fib Expansion Strategies in Commodity Trading

From Fibonacci expansion examples above, after plotting this Fib expansion tool there are two levels which are used to show the profit taking areas, these 2 Fibo expansion levels are drawn as horizontal lines across the commodity price chart.