How Do I Metals Trade With Metals Trading Fibonacci Extension?
Metal Fibonacci Extension Areas Trading Strategies in Metal Trading
Fib extension levels indicator is drawn using Three chart points.
To draw Metals Fibo Extension zones we wait until the metals price retracement is complete & the metals price starts to move in the original direction of the Metals trend. Where the retracement reaches is used as chart point 3.
The Fibonacci extension example illustrated and explained below shows the 3 Chart Points where the Fibonacci extension indicator is drawn, marked as Chart point 1, 2 and 3. Chart point 1 is where the metals trend started, Chart point 2 is where the metals trend pulled back & retraced & Chart point 3 is where the metals retracement reached as shown on the Metals Fibonacci Extension Indicator examples illustrated & described below.
How Do I Metals Trade With Metals Trading Fibo Extension?
Please note where these Metals Fib Extension levels are plotted - Metals Fib Extension levels are plotted above the Fibonacci Indicator, these are points where the trader will place the take-profit orders using these Metals Fibo Extension Levels - 61.8% and 100% Metals Fibo Extension Levels.
Drawing Metals Trading Fib Extension Levels Technical Indicator on an Upward Metals Trend
We use Fibonacci extension levels to estimate where the metals trend movement will reach. There are Two important Fibonacci extension levels: 61.8% and 100% Metals Fibo Extension Areas, these are used for taking profit.
On the Fibonacci extension example illustrated and explained below you can see that the Fibonacci extension technical indicator is drawn along the direction of the metals trend, since the metals trend is upward - the Fibonacci extension is also drawn upwards.
These Fibonacci extension levels are displayed as horizontal lines above the Metals Fibo Extension technical indicator, showing profit-taking areas. In the metal examples illustrated & described below if you had used 100% Fibo extension you would have made a good profit from using this trading setup.
Drawing Metals Fibonacci Extension Levels Indicator on an Upward Metals Trend - Metals Fibonacci Extension Indicator Levels Strategies in Metals Trading
From the above Fibonacci extension examples, the upward metals trend continued & both 61.80% & 100.0% Fibonacci extension levels were all hit after which metals price retraced again after hitting the 100.0 % Metals Trading Fibo Extension level.
Drawing Metal Trading Fib Extension Levels Metals Technical Indicator on a Downward Metal Trend
Since we use this Fibonacci extension indicator to estimate take profit levels, how do we draw it in a downward trend?
We draw the Fibonacci extension indicator from chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibonacci extension tool in the direction of the metal trend. In the Fibonacci extension example illustrated and explained below, can you figure what direction we have drawn it? That is right - downwards direction.
Try & spot the difference between how we have plotted the Fibonacci extension above and how Metals Fibonacci Extension is drawn below. This time you would also have used Fibonacci extension level 100%, just where the metals price reached as illustrated on the metal examples illustrated & described below. That would have been a nice take profit area.
Drawing Metals Fibonacci Extension Levels Indicator on a Downward Metals Trading Trend
From the Fibonacci extension example above, after drawing this Fibonacci extension tool there are two levels that are used to show the profit-taking areas, these two Fibonacci extension levels are drawn as horizontal lines across the metals price chart.
