How to Draw Fibonacci Metals Trading Projection Indicator
How Do I Use Metal Fibo Projection Levels on Metal Chart?
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.
To draw Fibo Projection levels on the metals chart 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 metals price retracement reaches is used as chart point 3. Fibo Projection Technical Indicator is drawn using Three chart points as shown on the metal trading examples illustrated & described below of how to draw the Fib Projection Indicator Tool.
The Fibonacci Projection example illustrated & described below shows the 3 Chart Points where the Fibonacci Projection indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 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 Fib Projection Technical Indicator Tool examples illustrated & described below.
How to Trade With Fibonacci Projection - How to Draw Fibonacci Projection Levels on Metals Charts
Please note where these Fibonacci Projection levels are drawn - Fibonacci Projection levels are plotted above the Fibonacci indicator, these are the chart points where a trader will place the take-profit orders using these Fib Projection Levels - 61.80% & 100.00% 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%Fibonacci Projection Level and 100% Fibonacci Projection Level, these Fibonacci Projection Levels are used for taking profit.
On the Fibonacci Projection technical indicator 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 upward - the Fibonacci Projection technical indicator is drawn upwards.
These Fibonacci Projection levels are displayed 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 100.0% Fibo Projection level the you would have made a good profit from the trade setup.
Drawing Fibo Projection Indicator on an Upward Metals Trend - Fib Projection Trading Tool
From the above Fibonacci Projection technical indicator examples, the upwards metals trend continued & both 61.80% & 100.0% Fibonacci Projection levels were all hit after which metals price retraced again after getting to the 100.0% Fibo Projection level.
Drawing Fibo Projection Levels on a Downward Metal Trend
Since we use the Fibonacci Projection technical indicator to estimate take profit levels, how do we draw Fibo Projection in a downward Metals trend?
We draw the Fibonacci Projection tool from chart point 1 to chart point 2 to chart point 3 as shown on the metal examples illustrated & described 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 is the direction that we have drawn it? That's right - downwards direction.
Try & spot the difference between how we have plotted Fibonacci Projection technical indicator above and how Fibonacci Projection technical indicator is drawn below. This time you would also have used Fibonacci Projection level 100.0%, just where the metals price reached as illustrated on the metal examples illustrated & explained below. That would have been a good take profit area.
Drawing Fibo Projection Indicator on a Downward Metals Trend - Fib Projection Trading Tool
From the Fibonacci Projection technical indicator 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 marked as 61.80%Fibo Projection Level & 100% Fibo Projection Level.
