How Do I Oil Trade With Oil Trading Fibonacci Expansion?

Fibonacci expansion is drawn using Three chart points.

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

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

Oil Trading Fibonacci Expansion Strategy using Oil Trading Fibonacci Expansion Levels

Please note where these Oil Trading Fib Expansion levels are drawn - Oil Trading Fibo Expansion levels are plotted above the Fibo Indicator, these are points where the trader will place the take-profit orders using these Oil Trading Fibonacci Expansion Levels - 61.8% & 100% Oil Trading Fib Expansion Areas.

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

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

On the Fibonacci expansion example explained below you can see that the Fibonacci expansion technical indicator is drawn along the direction of the oil trend, since the oil trend is upwards - the Fibonacci expansion 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 you would have made nice profit from the trade setup.

Drawing Oil Fibo Expansion Levels on an Upwards Oil Trend - Oil Trading Fibonacci Expansion Strategies in Oil Trading

From the above Fibonacci expansion examples, the upward oil trend continued & both 61.80% and 100.00% Fibonacci expansion levels were all hit after which crude oil price retraced again after hitting the 100.0 % Oil Trading Fibo Expansion level.

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

Since we use this Fib expansion tool to estimate take profit levels, how do we draw it in a downwards Oil Trading trend?

We draw the Fibonacci expansion indicator from chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibonacci expansion tool in the direction of the oil trend. In the Fibonacci expansion 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 plotted Fibonacci expansion above and how Oil Trading Fibonacci Expansion is drawn below. This time you would also have used Fibonacci expansion level 100%, just where the crude oil price reached as shown on the crude oil trading example explained below. That would have been a nice take profit area.

Drawing Oil Trading Fib Expansion Levels on a Downwards Oil Trading Trend

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