How to Draw Oil Trading Fib Extension on Downward Oil Trend

Drawing Oil Fib Extension Levels Indicator on a Downward Oil Trend

We draw the Oil Fib Extension indicator from chart point 1 to chart point 2 to chart point Three as shown and illustrated on oil examples shown below. Remember we always draw this Oil Fib Extension tool in the direction of the crude oil trend. In the Oil Fib Extension example shown and illustrated below, can you figure what is direction we have drawn it? That is right - downward direction.

As a oil trader you would also have used Oil Fib Extension level 100.0%, just where the crude crude oil price reached as shown on the Oil Fib Extension example shown below. That would have been a good take profit area.

How to Draw Oil Trading Fib Extension on Downward Oil Trend – How to Draw Crude Oil Fibonacci Extension on Down Oil Trend

From the Oil Fib Extension indicator tool example above, after drawing this Oil Fib Extension indicator tool there are 2 levels that are used to show the profit taking levels, these two Oil Fib Extension levels are drawn represented as horizontal lines across the crude oil chart marked as 61.8%Oil Fib Extension Level & 100% Oil Fib Extension Level.

Explanation of How to Draw Crude Oil Fib Extension Levels on Crude Oil Trading Charts

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

To draw Oil Fib Extension levels on crude oil chart 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 crude crude oil price retracement reaches is used as chart point 3. Oil Fib Extension Indicator tool is drawn using three chart points as shown on the oil example displayed below of how to draw the Oil Fib Extension Indicator Tool.

The Oil Fib Extension example shown and illustrated below shows 3 Chart Points where the Oil Fib Extension indicator is drawn, marked as Chart point 1, Chart point 2 and Chart point 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 Tool example shown and illustrated below.

How to Draw Crude Oil Fib Extension Indicator Tool on Downwards Oil Trend

Please note where these Oil Fib Extension levels are drawn – Oil Fib Extension levels are drawn above Fibo indicator, these are the chart points where a oil trader will set the take profit orders using these Oil Fibo Extension Levels - 61.8% Oil Fib Extension Level and 100.0% Oil Fib Extension Level.