How to Draw Commodity Trading Fib Extension on Downward Commodities Trend
Drawing Commodity Fibonacci Extension Areas Technical Indicator on a Downward Commodities Trend
We draw the Commodity Fibonacci Extension indicator from chart point 1 to chart point 2 to chart point 3 as shown and illustrated on the commodity example illustrated and explained below. Remember we always draw this Commodity Fibonacci Extension tool in direction of the commodities trend. In the Commodity Fibonacci Extension example illustrated and explained below, can you figure what is the direction we have drawn it? That is right - downwards direction.
As a trader you would also have used Commodity Fibonacci Extension level 100.0%, just where the commodities price reached as shown on the Commodity Fibonacci Extension example illustrated and explained below. That would have been a good take profit area.
How to Draw Commodity Trading Fib Extension on Downward Commodities Trend - How to Draw Commodity Trading Fibo Extension on Downward Commodities Trend
From the Commodity Fibo Extension indicator tool examples above, after plotting this Commodity Fibonacci Extension indicator tool there are 2 levels that are used to show the profit taking levels, these two Commodity Fibonacci Extension areas are drawn represented as horizontal lines across the commodities chart marked as 61.8%Commodity Fibonacci Extension Level & 100% Commodity Fib Extension Level.
Explanation of How to Draw Commodity Fibonacci Extension Levels on Commodities Trading Charts
We use Commodity Fibonacci Extension Levels to estimate where the commodity trend movement will reach. There are 2 oftenly used Commodity Fibonacci Extension levels: 61.8% Commodity Fibonacci Extension Level and 100% Commodity Fibonacci Extension Levels, these are used for setting taking profit levels.
To draw Commodity Fibonacci Extension levels on commodities chart we wait until the commodities price retracement is complete & the commodities price starts to move in original direction of the Commodities trend. Where the commodities price retracement reaches is used as chart point 3. Commodity Fibonacci Extension Indicator tool is drawn using three chart points as shown on the commodity example illustrated and explained below of how to plot the Commodity Fibonacci Extension Technical Indicator Tool.
The Commodity Fibonacci Extension example illustrated and explained below shows the 3 Chart Points where the Commodity Fibonacci Extension technical indicator is plotted, marked as Chart point 1, Chart point 2 and Chart point 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 Fibonacci Extension Technical Indicator Tool example illustrated & explained below.
How to Draw Commodity Fibonacci Extension Technical Indicator Tool on Downwards Commodities Trend
Please note where these Commodity Fib Extension areas are drawn - Commodity Fibonacci Extension zones are drawn above the Fibo indicator, these are the chart points where a trader will set the takeprofit orders using these Commodity Fibo Extension Levels - 61.8% Commodity Fibonacci Extension Level and 100.0% Commodity Fib Extension Level.
