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