How Do I Metals Trade With Fibonacci Projection? - Metals Fibo Projection Strategy using Fibo Projection Levels
What is Fibonacci Projection in Metal Trading?
Fibo projection is drawn using Three chart points.
To draw Fib Projection levels 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 projection example illustrated and explained below shows the 3 Chart Points where the Fibonacci projection 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 Fibonacci Projection Tool examples illustrated & described below.
Metals Trade With Fibonacci Projection? - Metals Fibo Projection Strategy using Fibo Projection Areas
Please note where these Fib Projection levels are drawn - Fibo Projection levels are plotted above the Fibonacci Indicator, these are points where the trader will place the take-profit orders using these Fib Projection Levels - 61.80% & 100% Fib Projection Zones.
Drawing Fibo Projection Levels on an Upward Metal Trend
We use Fibo projection levels to estimate where the metals trend movement will reach. There are Two important Fibonacci projection levels: 61.8% and 100% Fibonacci Projection Levels, these are used for taking profit.
On the Fibonacci projection example illustrated and explained below you can see that the Fibonacci projection technical indicator is drawn along the direction of the metals trend, since the metals trend is upwards - the Fibonacci projection is drawn upwards.
These Fib projection areas are shown as horizontal lines above the Fibonacci Projection technical indicator, showing the profit-taking areas. In the metal examples illustrated & described below if you had used 100% Fibo projection you would have made a good profit from the trade setup.
Drawing Fibonacci Projection Levels on an Upwards Metals Trend - Fibo Projection Strategies in Metals Trading
From the above Fibonacci projection examples, the upward metals trend continued & both 61.80% & 100.0% Fibonacci projection levels were all hit after which metals price retraced again after hitting the 100.0% Fibo Projection level.
Drawing Fibo Projection Levels on a Downward Metals Trend
Since we use this Fibonacci projection tool to estimate take profit levels, how do we draw it in a downwards Metals trend?
We draw the Fibonacci projection indicator from chart point 1 to 2 to 3 as shown below. Remember we always plot this Fibonacci projection tool in the direction of the metal trend. In the Fibonacci projection 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 Fibonacci projection above and how Fibonacci Projection is drawn below. This time you would also have used Fibonacci projection 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 Fib Projection Levels on a Downward Metals Trading Trend
From the Fibonacci projection example above, after drawing this Fibonacci projection tool there are two levels that are used to show the profit-taking areas, these two Fibonacci projection levels are drawn as horizontal lines across the metals price chart.
