How to Draw Commodity Trading Fib Projection

How Do I Use Commodity Fibo Projection Zones on Commodity Trading Chart?

We use Fibo Projection levels to estimate where the commodity trend movement will reach. There are Two important Fibo Projection levels: 61.8% and 100% Fibo Projection Levels, these are used for profit taking.

To draw Fibo Projection 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. Fibo Projection Indicator is plotted using three chart points as shown and illustrated on the commodity example illustrated and explained below of how to plot the Fibonacci Projection Technical Indicator Tool.

The Fibonacci Projection examples illustrated & explained below shows the 3 Chart Points where the Fibonacci Projection technical indicator is drawn, 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 Fib Projection Technical Indicator Tool example illustrated & explained below.

How to Trade With Fibonacci Projection - How to Draw Fibonacci Projection Zones on Commodity Trading Charts

Please note where these Fibonacci Projection areas are plotted - Fibo Projection zones are drawn above the Fibo indicator, these are the chart points where a trader will set the takeprofit orders using these Fib Projection Levels - 61.8% & 100.0% Fibo Projection Levels.

Drawing Fib Projection Zones on an Upwards Commodities Trend

We use Fibo Projection levels to estimate where the commodity trend movement will reach. There are Two important Fibonacci Projection levels: 61.8%Fibonacci Projection Level and 100% Fibonacci Projection Level, these Fibonacci Projection Levels are used for taking profit.

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

These Fibo Projection levels are shown as horizontal lines above Fibo Projection technical indicator, showing profit taking areas. In the commodity example illustrated & explained below if you had used 100.00% Fibonacci Projection level you would have made good profit from using this trading setup.

Drawing Fibonacci Projection Indicator on an Upward Commodities Trend - Fib Projection Tool

From the above Fibonacci Projection technical indicator examples, the upwards commodity trend continued & both 61.80% and 100.00% Fibonacci Projection levels were all hit after which commodities price retraced again after getting to the 100.0% Fibonacci Projection level.

Drawing Fib Projection Areas on a Downward Commodities Trend

Since we use the Fib Projection technical indicator to estimate take profit levels, how do we draw Fibo Projection in a downward Commodities trend?

We draw the Fibo Projection technical 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 Fibonacci Projection tool in direction of the commodities trend. In the Fibonacci Projection example illustrated and explained below, can you figure what is the direction we have drawn it? That is right - downwards direction.

Try & identify the difference between how we have plotted Fibonacci Projection technical indicator above and how Fibonacci Projection technical indicator is drawn below. This time you would also have used Fibonacci Projection level 100.0%, just where the commodities price reached as shown on the commodity example illustrated and explained below. That would have been a good take profit area.

Drawing Fibonacci Projection Indicator on a Downward Commodities Trend - Fib Projection Tool

From the Fibonacci Projection technical indicator example above, after plotting this Fibonacci Projection tool there are 2 levels that are used to show the profit taking areas, these two Fibonacci Projection areas are plotted as horizontal lines across the commodities price chart marked as 61.8%Fibo Projection Level and 100% Fibonacci Projection Level.