How to Draw Oil Fib Projection on Downwards Oil Trend
Drawing Fib Projection Levels on a Downwards Oil Trend
We draw the Fibo Projection indicator from chart point 1 to chart point 2 to chart point Three as shown and illustrated on the oil examples shown below. Remember we always draw this Fibonacci Projection tool in the direction of the crude oil trend. In the Fibo Projection example shown and illustrated below, can you figure what is the direction we have drawn it? That is right - downward direction.
As a oil trader you would also have used Fibonacci Projection level 100.0%, just where the crude crude oil price reached as displayed on the Fibonacci Projection example shown below. That would have been a good take profit area.
How to Draw Oil Fib Projection on Downwards Oil Trend – How to Draw Fibonacci Projection on Down Oil Trend
From the Fibonacci Projection indicator tool example above, after drawing this Fibonacci Projection indicator tool there are two levels that are used to show the profit taking levels, these two Fibonacci Projection levels are drawn as horizontal lines across the crude oil chart marked as 61.80%Fibo Projection Level & 100% Fibo Projection Level.
Explanation of How to Draw Fib Projection Levels on Oil Trading Charts
We use Fibo Projection levels to estimate where the oil trend movement will reach. There are 2 oftenly 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 the crude oil chart we wait until the crude crude oil price retracement is complete and the crude crude oil trading price starts to move in original direction of the Oil trend. Where the crude crude oil price retracement reaches is used as chart point 3. Fibonacci Projection Indicator tool is drawn using three chart points as shown on the oil examples displayed below of how to draw the Fibonacci Projection Indicator Tool.
The Fibo Projection example shown and illustrated below shows Three Chart Points where the Fibo Projection indicator is drawn, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the oil trend started, Chart point 2 is where the oil trend pulled back & retraced & Chart point 3 is where the oil retracement reached as shown and illustrated on Fib Projection Technical Indicator Tool example shown and illustrated below.
How to Draw Fib Projection Crude Oil Indicator Tool on Downward Oil Trend
Please note where these Fibo Projection levels are drawn - Fib Projection levels are drawn above Fibo indicator, these are the chart points where a oil trader will set the take profit orders using these Fibonacci Projection Levels - 61.8% Fibonacci Projection Level and 100.0% Fibonacci Projection Level.
