How to Oil Trade With Oil Trading Fibonacci Extension

Oil Fib Extension Technical Analysis Levels Trading Strategies in Oil

Fibo extension levels indicator is drawn using 3 chart points.

To draw Oil Fib Extension levels we wait until the crude crude oil price retracement is complete & the crude crude oil price starts to move in the original direction of the Oil trend. Where the retracement reaches is used as chart point 3.

The Fibo extension example shown and illustrated below shows Three Chart Points where the Fibonacci extension indicator is drawn, marked as Chart point 1, 2 and 3. Chart point 1 is where the oil trend started, Chart point 2 is where the oil trend pulled back and retraced & Chart point 3 is where the oil retracement reached as displayed on the Oil Fib Extension Indicator example shown and illustrated below.

Oil Trade With Crude Oil Trading Fibo Extension?

Please note where these Oil Fib Extension levels are drawn – Oil Fib Extension levels are drawn above Fibo Indicator, these are the points where the oil trader will set the take profit orders using these Oil Fib Extension Levels – 61.8% and 100% Oil Fib Extension Levels.

Drawing Crude Oil Fib Extension Levels on an Upward Crude Oil Trend

We use Fibonacci extension levels to estimate where the oil trend movement will reach. There are 2 important Fibonacci extension levels: 61.8% and 100% Oil Fib Extension Levels, these are used for profit taking.

On the Fibonacci extension example shown below you can see that the Fibonacci extension indicator is drawn along the direction of the oil trend, since the oil trend is upwards – the Fibonacci extension is also drawn upwards.

These Fibo extension levels are displayed as horizontal lines above Oil Fib Extension indicator, showing profit taking areas. In the oil example shown below if you had used of 100% Fibonacci extension you would have made nice profit from the trade setup.

Drawing Oil Fib Extension Levels Indicator on an Upward Oil Trend - Oil Fib Extension Trading Levels Strategies in Crude Oil Trading

From the above Fibonacci extension examples, the upward oil trend continued & both 61.80% and 100.00% Fibonacci extension levels were all hit after which crude crude oil price retraced again after hitting the 100.0 % Oil Fibonacci Extension level.

Drawing Oil Trading Fib Extension Levels Technical Indicator on a Downwards Oil Trend

Since we use this Fibonacci extension indicator to estimate take profit levels, how do we draw it in a downwards 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 crude oil trend. In the Fibonacci extension example shown below, can you figure what direction we have drawn it? That is right - downwards direction.

Try and spot difference between how we have drawn the Fibo extension above and how Oil Fib Extension is drawn below. This time you would also have used Fibonacci extension level 100%, just where the crude crude oil price reached as shown on the oil example shown below. That would have been a nice take profit area.

Drawing Oil Fib Extension Levels on a Downward Oil Trend - Oil Fib Extension Technical Indicator Levels Trading Strategies in Crude Oil Trading

From the Fibonacci extension example above, after drawing this Fibonacci extension tool there are 2 levels that are used to show the profit taking areas, these two Fibonacci extension levels are drawn as horizontal lines across the crude crude oil price chart.