How to Draw Oil Fib Projection on Downwards Oil Trading Trend
Trading Crude Oil Draw Fibonacci Projection for Oil Trading Downtrend
We draw the Fibo Projection technical indicator from chart point 1 to chart point 2 to chart point Three as shown and illustrated on the crude oil trading example explained below. Remember we always plot this Fibonacci Projection tool in the direction of the oil trend. In the Fibonacci Projection example explained below, can you figure what direction we have plotted it? That's right - downward direction.
As a trader you would also have used Fibonacci Projection level 100.0%, just where the crude oil price reached as shown on the Fibonacci Projection example explained below. That would have been a good take profit area.
How to Draw Oil Fib Projection on Downwards Oil Trend - How to Draw Fibonacci Projection on Down Oil Trading Trend
From the Fibonacci Projection technical indicator tool example above, after drawing this Fibonacci Projection technical indicator tool there are 2 levels that are used to show the profit taking levels, these two Fibonacci Projection levels are drawn as horizontal lines across the oil chart marked as 61.8%Fibo Projection Level and 100% Fibonacci Projection Level.
Explanation of How to Draw Fib Projection Zones on Crude Oil Trading Charts
We use Fibo Projection levels to estimate where the oil trend movement will reach. There are 2 oftenly used Fibonacci Projection levels: 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these are used for setting taking profit levels.
To draw Fibonacci Projection levels on the oil chart 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 crude oil price retracement reaches is used as chart point 3. Fibonacci Projection Indicator tool is drawn using three chart points as shown on the crude oil trading example explained below of how to draw the Fibonacci Projection Indicator Tool.
The Fibonacci Projection example explained below shows the 3 Chart Points where the Fibonacci Projection indicator is plotted, marked as Chart point 1, Chart point 2 and Chart point 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 shown on the Fib Projection Technical Indicator Tool example explained below.
How to Draw Fib Projection Crude Oil Indicator Tool on Downwards Oil Trading Trend
Please note where these Fibo Projection levels are plotted - Fibo Projection levels are plotted above the Fibo indicator, these are the chart points where a trader will place the take-profit orders using these Fibonacci Projection Levels - 61.8% Fibonacci Projection Level and 100.0% Fibonacci Projection Level.
