How Do I Interpret Oil Fibo Expansion Levels in Oil Trading?

How Do I Trade Oil Fibo Expansion Levels in Oil Trading?

Fibonacci expansion oil trading technical indicator is drawn using 3 oil trading chart points.

To draw Oil Trading Fibonacci Expansion levels on oil charts we wait until the crude oil price retracement is complete and the crude oil price starts to move in original direction of the Oil Trading trend. Where the crude oil price retracement reaches is used as oil chart point 3.

The Fibonacci expansion crude oil trading example explained below shows the 3 Oil Chart Points where the Fibonacci expansion oil indicator is drawn, marked as Oil Trade Chart point 1, 2 and 3. Oil Chart point 1 is where the oil trend started, Oil Trading Chart point 2 is where the oil trend pulled back and retraced and Oil Chart point 3 is where the crude oil price retracement reached as shown on the Oil Trading Fibonacci Expansion Oil Trading Tool crude oil trading example explained below.

Oil Trading Fibonacci Expansion Strategy using Oil Trading Fibo Expansion Levels

Please note where these Oil Trading Fibonacci Expansion zones are drawn on the oil chart - Oil Trading Fibo Expansion zones are plotted above the Fibo Oil Trading Indicator, these are points where the trader will set the oil take profit orders using these Oil Trading Fib Expansion Levels - 61.8% and 100% Oil Fib Expansion Areas.

Drawing Oil Fib Expansion Levels on an Upward Oil Trading Trend

We use Fibo expansion areas to estimate where the oil trend movement will reach. There are 2 important Fib expansion levels: 61.8% & 100% Oil Trading Fibonacci Expansion Levels, these Oil Trading Fibonacci Expansion Levels are used for taking oil profit.

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

These Fibo expansion levels are displayed as horizontal lines above the Oil Trading Fibo Expansion indicator, showing the profit taking areas. In the crude oil trading example explained below if you had used of 100% Fibonacci expansion level you would have made nice oil profit from the oil trade setup.

Drawing Crude Oil Fib Expansion Levels on an Upward Crude Oil Trading Trend

From the above Fibonacci expansion oil trading examples, the upward oil trend continued and both 61.8% & 100.00% Fibonacci expansion levels were all hit after which crude oil price retraced again after getting to the 100.0 % Oil Fibo Expansion level.

Drawing Oil Fibo Expansion Levels on a Downward Crude Oil Trading Trend

Since we use this Fibonacci expansion oil trading tool to estimate oil take profit levels, how do we draw it in a downward Oil Trading trend?

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

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

Drawing Oil Fib Expansion Levels on a Downward Oil Trading Trend

From the Fibonacci expansion crude oil trading example above, after drawing this Fibonacci expansion tool there are 2 levels that are used to show the oil profit taking areas, these 2 Fibonacci expansion levels on the oil indicator are drawn as horizontal lines across the trading crude oil price chart.

How Do You Trade Oil Fibo Expansion Levels in Oil Trading