How Do I Trade Retracement on Upward Trend

How Do You Draw Fibonacci Retracement for Uptrend?

The Fib retracement levels tool is placed on a chart in an upwards trend market and this Fib Retracement areas tool then calculates the price retracement levels for the upward trend on the chart. Fibonacci retracement levels tool is used by many traders as a trading retracement indicator.

In the Fibo Retracement Strategy Method example shown below the price is moving up between chart point 1 and chart point 2 then after chart point 2 price retraces down to 50.0 % Fib retracement level then price continues moving up in the original up-ward trend. Note that this Fib retracement areas indicator is drawn from chart point 1 to chart point two in direction of the trend (Upward Trend Direction).

Because we know that this is just a price retracement based on our trend - using this Fibonacci retracement levels indicator - we place a buy order just between the levels - 38.2% Fib retracement levels and 50.0% Fibonacci retracement levels and our stop loss order just below 61.8 % Fib retracement level.

How Do I Interpret a Retracement on an Upward Trend?

Explanation of XAUUSD Fibo Retracement Strategy Method Examples

Once the price hit the 50.0% Fib price pullback level, this Fibonacci retracement level provided a lot of support for the price, & afterwards the price then resumed the original up-ward trend and continued to move up-wards.

23.6% Fibonacci price retracement level provides minimum support for the trading retracement and is not an ideal place to place a trade order.

38.2% Fibonacci price retracement level provides some support but price in this example continued to retrace up to the 50% Fib Retracement level.

50.0% Fibonacci price retracement level provides a lot of support for the price and in this example - this was the ideal place to place a buy trade order.

For this Fib Retracement Strategy Method example - the price retracement reached the 50.0% Fibonacci price retracement level - but most of the times the price will retrace up to 38.2% Fibonacci price retracement level and therefore most of the time this is where traders set their buy limit orders at 38.2% Fibonacci price retracement level - while at the same time placing a stop loss order just below 61.8 % Fibonacci price pullback level.

How Do I Analyze Retracement on an Upward Trend