What's Difference between Commodities Fib Retracement and Commodity Trading Fibonacci Extension?

How to use Commodities Fib Retracement and Extension and the Difference between Commodities Fib Retracement and Extension

Commodities Trading Fibo Retracement Areas

Fib retracement is drawn between 2 chart points but Fib extension is plotted using 3 chart points.

Commodities Trading Fibo Retracement Level example illustrated & described below where the trend is moving downwards between Chart point 1 and Chart point 2, then after the Chart point 2 the trading price retraces then it continues heading upward in the original upwards trend. Note that this Commodities Trading Fibo Retracement Levels indicator is drawn from Chart point 1 to Chart point 2 in direction of the trend.

Commodities Trading Fibo Retracement Levels - How to Draw Commodities Trading Fibo Retracement Levels

Commodity Trading Fib Extension Levels

Fib retracement is drawn between 2 chart points but Fib extension is plotted using 3 chart points.

To draw these Commodity Trading Fib Extension levels we wait until the trading price retracement is complete and commodities trading price starts to move in original direction of the trend. Where the retracement reaches is used as chart point Three for Fib extension.

The Commodity Fibo Extension example illustrated & described below shows the Three chart Points where the Commodity Trading Fib Extension indicator is plotted, marked as chart point 1, 2 and 3. Chart point 1 is where the trend started, Chart point 2 is where the trend pulled back & retraced & Chart point 3 is where the retracement reached as shown and illustrated on the Commodity Fibo Extension examples illustrated and described below.

Commodity Trading Fibo Expansion Levels - How to Draw Commodity Trading Fib Extension Levels

Please note where these Commodity Trading Fib Extension areas are plotted - Commodity Trading Fib Extension levels are drawn above the Commodity Trading Fib Extension indicator, these are the points where a trader will set the take profit orders.