How to Trade Retracement on Upward Commodities Trend
How Do I Draw Commodities Trading Fibonacci Retracement for Commodities Uptrend?
The Fibonacci retracement indicator is placed on a commodity chart in an upward commodity trending market and this Commodities Trading Fibonacci Retracement indicator then calculates the retracement levels for the commodity upward trend on the commodities charts. Fibonacci retracement levels commodity indicator is used by many commodity traders as a commodity retracement trading indicator.
In the Commodities Retracement Strategy example illustrated and explained below the commodities price is moving up between chart point 1 and chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then commodities price continues moving up in the original upward commodities trend. Note that this commodity Fibonacci retracement indicator is drawn from point 1 to point 2 in the direction of the commodities trading trend (Upward Direction).
Because we know this is just a retracement based on our commodity chart commodity trend - using this Fibonacci retracement indicator, we put a buy order just between the levels 38.2% and 50.0% retracement levels and our stop loss just below 61.8% retracement level. If you had put a buy at this point in the trade example illustrated and explained below you would have made a lot of pips after the commodities price retracement reached the Fibonacci 50.0% level and then continued moving in the original upward commodities trend.
How to Trade Commodities Price Retracement on Upward Commodities Trend - Commodities Trading Fibonacci Retracement Levels Trading
Explanation for the Above Commodities Trading Fibonacci Retracement Strategy Example
Once the commodities price hit the 50.0% Fibonacci retracement level, this retracement level provided a lot of support for the commodities price, and afterwards the commodity market then resumed the original upward commodity trend and continued to move up.
23.6% Fibonacci retracement level provides minimum support and is not an ideal place to place a commodity order.
38.2% Fibonacci retracement level provides some support but commodities price in this example continued to retrace up to the 50% zone.
50.0% Fibonacci retracement level provides a lot of support and in this example, this was the ideal place to place a buy commodity order.
For this Commodities Retracement Strategy example, the commodities price retracement reached the 50.0% Fibonacci retracement level, but most of the time the commodity market will retrace up to 38.2% Fibonacci retracement level and therefore most of the time commodity traders set their buy limit commodity orders at the 38.2% Fibonacci retracement level, while at the same time placing a stop just below 61.8% Fibonacci retracement level.
