How to Draw Fibonacci Commodity Trading Projection Indicator

How Do I Use Commodity Trading Fibo Projection Zones on Commodity Trading Chart?

We use Fib Projection levels to estimate where the trend movement will reach. There are Two important Fib Projection levels: 61.8% & 100% Fib Projection Levels, these are used for taking profit.

To draw Fib Projection levels on commodity chart we wait until the commodity price retracement is complete and the price starts to move in original direction of the Commodity Trading trend. Where the commodity price retracement reaches is used as chart point 3. Fib Projection Indicator is drawn using 3 chart points as shown on the commodities trading example illustrated and shown below of how to draw the Fibo Projection Technical Indicator.

The Fibo Projection example illustrated and shown below shows Three Chart Points where the Fibo Projection technical indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 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 Fibo Projection Indicator examples illustrated and shown below.

How to Trade With Fibonacci Projection - How to Draw Fibonacci Projection Zones on Commodity Trading Charts

Please note where these Fibonacci Projection levels are plotted - Fib Projection zones are drawn above the Fibo indicator, these are the chart points where one will place takeprofit orders using these Fib Projection Levels - 61.8% & 100.0% Fib Projection Levels.

Drawing Fib Projection Zones on an Upwards Commodities Trading Trend

We use Fib Projection levels to estimate where the trend movement will reach. There are Two 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 and shown below you can see that the Fibonacci Projection technical indicator tool is drawn along the direction of the trend, since the trend is upward - the Fibonacci Projection technical indicator is drawn upwards.

These Fibo Projection levels are shown as horizontal lines above Fib Projection technical indicator, showing profit taking areas. In the commodities trading example illustrated and shown below if as a trader you had used of 100.0% Fib Projection level you would have made a nice profit from the trade setup.

Drawing Fibo Projection Indicator on an Upward Commodity Trend - Fibonacci Projection Tool

From the above Fibonacci Projection technical indicator example, the upward trend continued and both 61.8% & 100.0% Fibonacci Projection levels were all hit after which commodity price retraced again after getting to the 100.0% Fibo Projection level.

Drawing Fibo Projection Levels on a Downward Commodities Trading Trend

Since we use the Fib Projection technical indicator tool to estimate take profit levels, how do we draw Fibo Projection in a downward Commodity Trading trend?

We draw the Fibo Projection tool from chart point 1 to chart point 2 to chart point 3 as shown on the commodities trading example shown below. Remember we always plot this Fibo Projection tool in the direction of the trend. In the Fibo Projection example illustrated and shown below, can you figure what is direction that we have drawn it? That's right - downward direction.

Try & spot 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 price reached as illustrated on the commodities trading example shown below. That would have been a good take profit area.

Drawing Fibo Projection Indicator on a Downward Commodity Trend - Fibonacci Projection Tool

From the Fibonacci Projection technical indicator example above, after drawing this Fibonacci Projection tool there are 2 levels that are used to show the profit-taking areas, these two Fibonacci Projection levels are plotted as horizontal lines across the commodity price trading chart marked as 61.80%Fibo Projection Level & 100% Fibo Projection Level.