How Do You Draw Fib Extension Levels on Downward XAUUSD Trend?
How Do You Draw Fib Extension Levels on Downward XAUUSD Trend?
We draw the Fibonacci Extension indicator from chart point 1 to chart point 2 to chart point 3 as displayed on the Fibonacci extension gold trading examples shown below. Remember we always plot this Fibonacci Extension tool in the direction of the trend. In the Fibonacci Extension example shown below, can you figure what direction we have plotted it? That's right - downwards direction.
As a trader you would also have used Fibo Extension level 100.0%, just where the price reached as shown on the Fibonacci Extension example shown below. That would have been a good xauusd take profit area.
How Do You Draw Fib Extension Levels on Downward XAUUSD Trend?
From the Fibonacci Extension tool example above, after drawing this Fibonacci Extension indicator tool there are 2 levels that are used to show the xauusd profit taking levels - these two Fibonacci Extension levels are represented as horizontal lines across the xauusd chart marked as 61.8% Gold Fibo Extension Level and 100% Fibonacci Extension Level.
Interpretation of How Do You Draw Fibonacci Extension Levels on Gold Charts?
XAUUSD traders Fibonacci Extension levels to estimate where the price movement will reach. There are 2 commonly used Fibo Extension areas: 61.8% Fibonacci Extension Level and 100% Fibonacci Extension Levels - these fibonacci extension levels are used for setting xauusd taking profit levels.
To draw Fibonacci Extension levels on the xauusd chart we wait until the gold price retracement is complete & the price starts to move in original direction of the XAUUSD trend. Where the gold price retracement reaches is used as chart point 3. Fibonacci Extension XAUUSD Indicator is drawn using three chart points as shown on the Fib extension gold trading example illustrated & shown below of how to draw the Fibonacci Extension Technical Indicator.
The Fibonacci Extension example shown below shows the 3 XAUUSD Chart Points where the Fibonacci Extension gold technical indicator is drawn, marked as XAUUSD Chart point 1, XAUUSD Chart point 2 & XAUUSD Chart point 3.
XAUUSD Chart point 1 is where the xauusd trend started, XAUUSD Chart point 2 is where the price pulled back and retraced and XAUUSD Chart point 3 is where the xauusd retracement reached as displayed on the Fibonacci Extension Gold Indicator example shown below.
How Do You Draw Fibonacci Extension Levels on Downward Gold Trend?
Please note where these Fibonacci Extension levels are plotted - Fibonacci Extension zones are drawn above the Fibonacci xauusd technical indicator, these are the chart points where a trader will set the xauusd take-profit orders using these Fibonacci Extension Levels - 61.8% Fibonacci Extension Level and 100.0% Fib Extension Level.
How Do You Draw Fibonacci Extension Levels on Downward Gold Trend?
