How to Draw Fibonacci Projection on Down Commodity Trading Trend

Commodity Draw Fibonacci Projection for Commodity Trading Downtrend

We draw the Fibo Projection tool from chart point 1 to chart point 2 to chart point Three as shown on the commodities trading example illustrated below. Remember we always draw this Fibo Projection tool in 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 - downwards direction.

As a trader you would also have used Fibonacci Projection level 100.0%, just where the price reached as illustrated on the Fibonacci Projection example shown below. That would have been a good take profit area.

How to Draw Commodity Trading Fib Projection on Downward Commodity Trading Trend

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

Explanation of How to Draw Fib Projection Levels on Commodity Charts

We use Fib Projection levels to estimate where the trend movement will reach. There are 2 commonly used Fibonacci Projection levels: 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these are used for setting taking profit levels.

To draw Fib Projection levels on the commodity chart 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. Fibonacci Projection Indicator tool is drawn using three chart points as shown on the commodities trading example illustrated and shown below of how to plot 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 and Chart point 3 is where the commodity retracement reached as displayed on the Fibo Projection Indicator examples illustrated and shown below.

How to Draw Fib Projection Trading Indicator Tool on Downward Commodity Trading Trend

Please note where these Fibo Projection areas are plotted - Fib Projection levels are drawn above the Fibo technical indicator, these are chart points where one will place the take-profit orders using these Fibonacci Projection Levels - 61.8% Fibonacci Projection Level and 100.0% Fibonacci Projection Level.