How to Commodities Trade With Commodity Trading Fibonacci Extension
Commodity Trading Fibonacci Extension Levels Trading Strategies in Commodities
Fibonacci extension levels indicator is drawn using 3 chart points.
To draw Commodity Trading Fibonacci Extension 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 extension example illustrated and explained below shows the 3 Chart Points where the Fibonacci extension 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 Extension Indicator example illustrated and explained below.
Commodities Trade With Commodity Trading Fibonacci Extension?
Please note where these Commodity Trading Fibonacci Extension levels are drawn - Commodity Trading Fibonacci Extension 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 Extension Levels - 61.8% and 100% Commodity Trading Fibonacci Extension Levels.
Drawing Commodity Trading Fibonacci Extension Levels on an Upward Commodities Trend
We use Fibonacci extension levels to estimate where the commodity trend movement will reach. There are 2 important Fibonacci extension levels; 61.8% and 100% Commodity Trading Fibonacci Extension Levels, these are used for taking profit.
On the Fibonacci extension example illustrated and explained below you can see that the Fibonacci extension indicator is drawn along the direction of the commodity trend, since the commodity trend is upwards - the Fibonacci extension is also drawn upwards.
These Fibonacci extension levels are displayed as horizontal lines above the Commodity Trading Fibonacci Extension indicator, showing profit taking areas. In the commodity example illustrated and explained below if you had used of 100% Fibonacci extension you would have made nice profit from the trade setup.
Drawing Commodity Trading Fibonacci Extension Levels Commodity Indicator on an Upward Commodities Trend - Commodity Trading Fibonacci Extension Trading Levels Strategies in Commodity Trading
From the above Fibonacci extension examples, the upward commodity trend continued and both 61.8% and 100.0% Fibonacci extension levels were all hit after which commodities price retraced again after hitting the 100.0 % Commodity Trading Fibonacci Extension level.
Drawing Commodity Trading Fibonacci Extension Levels Commodities Indicator on a Downward Commodities Trend
Since we use this Fibonacci extension indicator tool to estimate take profit levels, how do we draw it in a downward trend?
We draw the Fibonacci extension indicator from chart point 1 to 2 to 3 as shown below. Remember we always draw this Fibonacci extension tool in the direction of the commodities trend. In the Fibonacci extension 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 the Fibonacci extension above and how Commodity Trading Fibonacci Extension is drawn below. This time you would also have used Fibonacci extension 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 Extension Levels Technical Indicator on a Downward Commodities Trend - Commodity Trading Fibonacci Extension Technical Levels Trading Strategies in Commodity Trading
From the Fibonacci extension example above, after drawing this Fibonacci extension tool there are two levels that are used to show the profit taking areas, these two Fibonacci extension levels are drawn as horizontal lines across the commodities price chart.
