How to Trade Retracement on Downwards Oil Trend
How Do You Draw Oil Trading Fib Retracement for Oil Downtrend?
The fibonacci retracement indicator is placed on a oil chart in an downward oil trending market and this Crude Oil Trading Fibonacci Retracement indicator then calculates the retracement levels for the oil downward trend on the crude oil charts. Fibonacci retracement levels oil indicator is used by many oil traders as a oil retracement trading technical indicator.
In the Oil Retracement Strategy example shown below the oil market is moving downwards between chart point 1 and chart point 2, then after chart point 2 the crude crude oil price then retraces up to 38.20% retracement level then it continues heading downwards in the original downward crude oil trend. Note that this oil Fibonacci retracement indicator is drawn from point 1 to point 2 in the direction of the oil trend (Downwards Direction).
Because we know this is just a retracement based on the crude oil chart oil trend we put a sell order at 38.2% Fibonacci retracement level and a stop loss just above 61.8% Fibonacci retracement level.
If you had put a sell order at the 38.2% Fibonacci retracement level as shown on the oil trade below you would have made a lot of pips afterwards after the crude crude oil price reached the 38.2% Fibonacci retracement level and then resumed the downward crude oil trend.
In this trade the retracement of crude crude oil price reached 38.2% Fibo retracement level and did not get to 50.0% Fibo retracement level. It is always good to use 38.20% Fibonacci retracement level because most times the crude crude oil price retracement does not always get to 50.0% Fibo retracement level.
How to Trade Oil Price Retracement on Downward Oil Trend - Crude Oil Trading Fib Retracement Levels Indicator on Oil Trading Chart
Explanation for the Above Oil Trading Fib Retracement Strategy Example
The above Crude Oil Trading Fibonacci Retracement Strategy example is a oil retracement trading setup where the crude crude oil price retraces immediately after touching the 38.2% Crude Oil Trading Fibo Retracement Level.
This Crude Oil Trading Fibonacci Retracement level provided a lot of resistance for the crude crude oil price retracement, this was the best place for a oil trader to place a sell limit oil order as the oil market quickly moved down after hitting this 38.2% Fibonacci retracement level.
