How to Commodities Trade With Commodities Trading Fibonacci Expansion

Fibonacci expansion is drawn using 3 chart points.

To draw Commodity Trading Fibonacci Expansion levels we wait until the commodities price retracement is complete and the commodities price starts to move in the original direction of the Commodities trend. Where the retracement reaches is used as chart point 3.

The Fibonacci expansion example illustrated and 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 commodity trend started, Chart point 2 is where the commodity trend pulled back and retraced and Chart point 3 is where the commodity retracement reached as shown on the Commodity Trading Fibonacci Expansion Tool example illustrated and explained below.

Commodities Trade With Commodities Trading Fibonacci Expansion?

Please note where these Commodity Trading Fibonacci Expansion levels are drawn - Commodity Trading Fibonacci Expansion levels are drawn above the Fibonacci Indicator, these are the points where the commodity trader will set the take profit orders using these Commodity Trading Fibonacci Expansion Levels - 61.8% and 100% Commodity Trading Fibonacci Expansion Levels.

Drawing Commodity Trading Fibonacci Expansion Levels Technical Indicator on an Upward Commodities Trend

We use Fibonacci expansion levels to estimate where the commodity trend movement will reach. There are 2 important Fibonacci expansion levels; 61.8% and 100% Commodity Trading Fibonacci Expansion Levels, these are used for taking profit.

On the Fibonacci expansion example illustrated and explained below you can see that the Fibonacci expansion indicator is drawn along the direction of the commodity trend, since the commodity trend is upwards - the Fibonacci expansion is drawn upwards.

These Fibonacci expansion levels are displayed as horizontal lines above the Commodity Trading Fibonacci Expansion indicator, showing profit taking areas. In the commodity example illustrated and explained below if you had used of 100% Fibonacci expansion you would have made nice profit from the trade setup.

Drawing Commodity Trading Fibonacci Expansion Levels on an Upward Commodities Trend - Commodity Trading Fibonacci Expansion Levels Strategies in Commodity Trading

From the above Fibonacci expansion examples, the upward commodity trend continued and both 61.8% and 100.0% Fibonacci expansion levels were all hit after which commodities price retraced again after hitting the 100.0 % Commodity Trading Fibonacci Expansion level.

Drawing Commodity Trading Fibonacci Expansion Levels Indicator on a Downward Commodities Trend

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

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

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

Drawing Commodity Trading Fibonacci Expansion Levels Commodities Technical Indicator on a Downward Commodities Trend - Commodity Trading Fibonacci Expansion Levels Trading Strategies in Commodity Trading

From the Fibonacci expansion example above, after drawing this Fibonacci expansion tool there are two levels that are used to show the profit taking areas, these two Fibonacci expansion levels are drawn as horizontal lines across the commodities price chart.