How to Commodities Trade With Commodities Trading Fibonacci Expansion
Fibonacci expansion is drawn using Three chart points.
To draw Commodity Trading Fibonacci Expansion levels we wait until the commodities trading price retracement is complete and commodities trading price starts to move in 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 technical 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 & retraced and Chart point 3 is where the commodity retracement reached as displayed on the Commodity Trading Fibonacci Expansion Tool example illustrated & described below.
Commodities Trade With Commodities Fibo Expansion?
Please note where these Commodity Trading Fibonacci Expansion levels are plotted - Commodity Trading Fibonacci Expansion levels are plotted above Fibonacci Technical Indicator, these are points where the trader will set the takeprofit orders using these Commodity Trading Fibonacci Expansion Levels - 61.8% and 100% Commodity Trading Fibonacci Expansion Areas.
Drawing Commodity Trading Fibonacci Expansion Levels Technical Indicator on an Upwards Commodities Trend
We use Fibonacci expansion areas to estimate where the commodity trend movement will reach. There are Two important Fibonacci expansion areas: 61.8% and 100% Commodity Fibonacci Expansion Levels, these are used for profit taking.
On the Fibonacci expansion example illustrated and explained below you can see that the Fibonacci expansion technical indicator is plotted 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 Fibo Expansion technical 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 set-up.
Drawing Commodity Fibo Expansion Levels on an Upwards Commodities Trend - Commodity Trading Fibonacci Expansion Levels Strategies in Commodity Trading
From the above Fibonacci expansion examples, the upward commodity trend continued & both 61.80% and 100.00% Fibonacci expansion levels were all hit after which commodities trading price retraced again after hitting the 100.0 % Commodity Trading Fibo Expansion level.
Drawing Commodity Trading Fibonacci Expansion Levels Technical Indicator on a Downwards Commodities Trend
Since we use this Fibonacci expansion tool to estimate take profit levels, how do we draw it in a downwards Commodities 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 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 identify the difference between how we have plotted 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 trading price reached as shown on the commodity example illustrated and explained below. That would have been a nice take profit area.
Drawing Commodities Trading Fibonacci Expansion Levels Technical Indicator on a Downwards Commodities Trend - Commodity Fibo Expansion Levels Trading Strategies in Commodity Trading
From the Fibonacci expansion examples above, after plotting this Fib expansion tool there are two levels which are used to show the profit taking areas, these 2 Fibo expansion levels are drawn as horizontal lines across the commodities trading price chart.
