Commodity Trading Retracement System for Commodity Trading
How Do I Use Commodity Trading Fibonacci in Commodity Trading?
A good commodity trading retracement strategy to use is the fibonacci retracement indicator. Fibonacci retracement indicator is used by many traders as a commodity trading retracement strategy trading indicator.
The fibonacci retracement indicator is placed on a commodity chart and this Commodity Trading Fibonacci Retracement indicator then calculates the retracement levels on the commodity charts.
Commodities Trading Fib Retracement Strategy Examples on Upward Commodities Trend & Downwards Commodities Trading Trend
Commodity Trading Retracement Strategy
In the Commodity Trading Retracement Strategy example illustrated and shown below commodity price is moving up between chart point 1 & chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then commodity price continues moving up in the original upwards trend. Note that this retracement technical indicator is plotted from point 1 to point 2 in the direction of the Commodity trend (Upward Direction).
Because we know this is just a retracement based on our commodity chart commodity trend - using this retracement indicator, we put a buy order just between the levels 38.2% and 50.0% & our stoploss just below 61.8% pull back mark. If you had put a buy at this point in trade example shown below you would have made a lot of pips after the price retracement reached the Fibonacci 50.0% level and then continued moving in the original upwards trend.
How to Trade Retracement on Upward Commodity Trend - Commodity Trading Retracement Strategy
Explanation for the Above Commodities Trading Retracement Strategy Examples
Once the commodity price hit the 50.00% retracement level, this retracement level provided a lot of support for the commodity price, & afterwards the commodities market then resumed the original upwards trend & continued to move upward.
23.60% retracement level provides minimum support & is not an ideal place to place a commodity order.
38.2% retracement level provides some support but commodity price in this example continued to retrace up to the 50% zone.
50.00% retracement level provides a lot of support & in this example, this was the ideal place to set a buy commodity order.
For this Commodity Trading Retracement Strategy example, the commodity price retracement reached the 50.0% retracement level, but most of the time the commodities trading market will retrace up to 38.2% retracement level and therefore most of the time commodity traders set their buy limit pending orders at 38.2% Fib retracement level, while at same time placing a stop just below 61.8% Fib retracement level.
Commodity Trading Retracement Strategy
In the Commodity Trading Retracement Strategy example illustrated and shown below commodities trading market is moving down between chart point 1 & chart point 2, then after chart point 2 the commodity price then retraces upto 38.20% retracement level then it continues moving downwards in the original downward trend. Note that this retracement technical indicator is plotted from point 1 to point 2 in the direction of the Commodity trend (Downwards Direction).
Because we know this is just a retracement based on the commodity chart commodity trend we put a sell order at 38.2% retracement level and a stop loss just above 61.8% retracement level.
If you had put sell order at the 38.2% retracement level as shown on the trade below you would have made a lot of pips afterwards after the price reached the 38.2% retracement level and then resumed the downward commodities trend.
In this trade the retracement of commodity price reached 38.20% retracement level & did not get to 50.0% retracement level. It is always good to use 38.20% retracement level because most times the commodity price retracement does not always get to 50.0% retracement level.
How to Trade Retracement on Downwards Commodity Trend - Commodity Trading Retracement Strategy
Explanation for the Above Commodities Trading Retracement Strategy Examples
The above Commodity Trading Retracement Strategy example is a commodity retracement setup where the price retraces immediately after touching the 38.20% Commodities Trading Chart Fib Retracement Level.
This Commodity Trading Retracement level provided a lot of resistance for the commodity price retracement, this was the best place for a trader to place a sell limit pending order as commodities trading market quickly moved down after hitting this retracement level.
