How to Analyze Fibonacci Projection Zones on XAUUSD Charts
How Do I Read Fibonacci Projection Zones on XAUUSD Charts?
Fibonacci projection gold trading technical indicator is drawn using Three chart points.
To draw Fib Projection levels we wait until the gold price retracement is complete & the price starts to move in original direction of the trend. Where the gold price retracement reaches is used as chart point 3.
The Fibonacci projection xauusd example shown below shows the 3 Gold Chart Points where the Fibonacci projection gold indicator is drawn, marked as Gold Chart point 1, 2 and 3. Gold Chart point 1 is where the xauusd trend started, Gold Chart point 2 is where the xauusd trend pulled back & retraced and Gold Chart point 3 is where the price retracement reached as illustrated on the Fibonacci Projection XAUUSD Tool gold trading example below.
Interpret Fibo Projection Zones on XAUUSD Charts?
Please note where these Fibonacci Projection levels are plotted - Fibonacci Projection zones are plotted above the Fibo Gold Indicator, these are points where the trader will set the gold take profit orders using these fib Projection Levels - 61.8% and 100% Fibonacci Projection Levels.
Drawing Fibo Projection Zones on an Upwards Gold Trend
We use Fibonacci projection levels to estimate where the trend movement will reach. There are 2 important Fibonacci projection levels: 61.8% and 100% Fibonacci Projection Levels, these Fibonacci Projection Levels are used for setting xauusd take profit areas.
On the Fibonacci projection xauusd example shown below you can see that the Fibonacci projection technical indicator is drawn along the direction of the trend, since the trend is upwards - the Fibo projection is drawn upwards.
These Fibonacci projection levels are displayed as horizontal lines above the Fibonacci Projection gold technical technical indicator, showing profit taking areas. In the xauusd example shown below if you had used of 100% Fibonacci projection you would have made nice xauusd profit from the xauusd trade setup.
Drawing Fibo Projection Zones on an Upwards XAUUSD Trend - Fibo Projection Strategies in XAUUSD
From the above Fibonacci projection xauusd examples, the upward trend continued and both 61.8% & 100.0% Fibonacci projection levels were all hit after which gold price retraced again after getting to the 100.0% Fibo Projection level.
Drawing Fib Projection Levels on a Downwards XAUUSD Trend
Since we use this Fibo projection tool to estimate xauusd take profit levels, how do we draw it in a downwards XAUUSD 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 trend. In the Fibonacci projection xauusd example shown below, can you figure what direction we have drawn it? - downwards direction.
Try & spot the difference between how we have drawn Fibonacci projection above and how Fibonacci Projection is drawn below. This time you would also have used Fibonacci projection level 100%, just where the price reached as illustrated on the xauusd example shown below. That would have been a nice xauusd take profit area.
Drawing Fibo Projection Levels on a Downwards XAUUSD Trend - Fibo Projection Strategies in XAUUSD
From the Fibonacci projection xauusd example above, after drawing this Fibonacci projection xauusd tool there are two levels that are used to show the xauusd profit taking areas, these two Fibonacci projection xauusd trading levels are drawn as horizontal lines across the gold trading chart.
How Do You Analyze Fibo Projection Zones on XAUUSD Charts?
