How Do I Interpret Oil Trading Fibo Projection Zones on Oil Trading Charts?

How Do I Trade Oil Trading Fibo Projection Zones on Oil Trading Charts?

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

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

The Fibonacci projection crude oil trading example explained below shows the 3 Oil Trading Chart Points where the Fibonacci projection 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 Fib Projection Oil Trading Tool crude oil trading example explained below.

How Do I Interpret Oil Trading Fibo Projection Zones on Oil Trading Charts?

Please note where these Fib Projection levels are plotted - Fibonacci Projection zones are plotted above the Fibonacci Oil Trading Indicator, these are points where the trader will set the oil take profit orders using these fibonacci Projection Levels - 61.8% and 100% Fibonacci Projection Levels.

Drawing Fib Projection Zones on an Upward Oil Trading Trend

We use Fibonacci projection levels to estimate where the oil trend movement will reach. There are 2 important Fibonacci projection levels: 61.8% and 100% Fibonacci Projection Levels, these Fibonacci Projection Levels are used for setting oil take profit areas.

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

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

Drawing Fibo Projection Zones on an Upward Oil Trend - Fibo Projection Strategies in Oil Trading

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

Drawing Fibo Projection Levels on a Downward Crude Oil Trading Trend

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

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

Try & spot the difference between how we have drawn Fibonacci projection above and how Fibonacci Projection is drawn below. This time you would also have used Fibonacci projection 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 Fib Projection Levels on a Downward Oil Trend - Fibo Projection Strategies in Oil Trading

From the Fibonacci projection crude oil trading example above, after drawing this Fibonacci projection oil tool there are two levels which are used to show the oil profit taking areas, these two Fibonacci projection oil levels are drawn as horizontal lines across the crude oil trading chart.

How Do You Trade Oil Trading Fibo Projection Zones on Oil Trading Charts