Commodity Trading Fib Extension Strategy using Commodity Trading Fib Extension Levels

Trading with Commodity Trading Fib Extension Indicator

Fibo extension levels indicator is drawn using Three chart points.

To draw Commodity Trading Fib Extension levels we wait until commodity price retracement is complete and the price starts to move in original direction of the Commodity Trading trend. Where the retracement reaches is used as chart point 3.

The Fibo extension example illustrated and shown below shows 3 Chart Points where the Fibonacci extension 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 & Chart point 3 is where the commodity retracement reached as displayed on the Commodity Fibo Extension Technical Indicator examples illustrated & shown below.

Commodity Trading Fib Extension Strategy using Commodity Fibo Extension Zones

Please note where these Commodity Trading Fib Extension levels are plotted - Commodity Trading Fib Extension zones are drawn above the Fibo Technical Indicator, these are points where the trader will set the take-profit orders using these Commodity Trading Fib Extension Levels - 61.8% & 100% Commodity Trading Fib Extension Levels.

Drawing Commodity Trading Fib Extension Zones on an Upwards Commodity 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 example shown below you can see that the Fibonacci extension technical indicator is drawn along the direction of the trend, since the trend is upward - the Fibonacci extension 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 trade setup.

Drawing Commodity Fib Extension Zones on an Upward Commodity Trend - Commodity Trading Fib Extension Strategies in Commodity Trading

From the above Fibonacci extension examples, the upward trend continued & both 61.80% & 100.00% Fibonacci extension levels were all hit after which commodity price retraced again after getting to the 100.0 % Commodity Fibonacci Extension level.

Drawing Commodities Trading Fib Extension Areas on a Downwards Commodities Trading Trend

Since we use this Fibonacci extension indicator tool to estimate 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 the direction of the trend. In the Fibonacci extension example shown below, can you figure what direction we have drawn it? That is right - downwards direction.

Try & spot 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 take profit area.

Commodity Trading Fib Extension Strategies in Commodity Trading

From the Fibonacci extension example above, after drawing this Fibonacci extension tool there are 2 levels that are used to show the profit-taking areas, these two Fibonacci extension levels are drawn as horizontal lines across the commodity price chart.