How Do I Interpret Fibonacci Retracement vs Fibonacci Expansion?

How to Analyze Fibonacci Retracement vs Fibonacci Expansion

Fibo retracement is drawn between 2 chart points but Fib expansion is plotted using three chart points.

Fibonacci Retracement indicator example shown below - where the xauusd trend is moving downwards between XAUUSD Chart point 1 and XAUUSD Chart point 2 - then after XAUUSD Chart point 2 the gold price retraces then it continues moving up in the original upward trend. Note that this Fibonacci Retracement indicator is drawn from XAUUSD Chart point 1 to XAUUSD Chart point 2 in the direction of the trend.

How Do You Interpret Fibonacci Retracement vs Fibonacci Expansion

XAUUSD Trading Fib Expansion Levels

Fibonacci retracement indicator is drawn between 2 chart points but Fibo expansion is plotted using Three chart points.

To draw these Fibonacci Expansion levels xauusd traders will 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 - this point is used as chart point 3 for Fibonacci expansion indicator.

The Fibonacci Expansion indicator example shown below shows the 3 chart points where the Fibonacci Expansion indicator is drawn, marked as chart points 1, 2 and 3. XAUUSD Chart point 1 is where the xauusd trend started, XAUUSD Chart point 2 is where the price pulled back and retraced and Chart point 3 is where the price retracement reached as shown on the Fibonacci Expansion indicator example shown below.

Analyze Fibonacci Retracement vs Fibonacci Expansion?

Please note where these Fibonacci expansion levels are drawn - Fibo Expansion zones are plotted above the Fibonacci Expansion indicator - these are the points where a trader will set xauusd take profit orders.

Read Fibonacci Retracement vs Fibonacci Expansion