How Do You Draw XAUUSD Trading Fib Expansion Levels?
How Do You Draw XAUUSD Trading Fib Expansion Levels?
Traders use Fibonacci expansion levels to estimate where the trend movement will reach. There are two commonly used Fibonacci expansion levels - 61.8% Fibonacci Expansion Level and 100% Fibonacci Expansion Levels, these fibonacci expansion levels are used for setting xauusd take profit areas.
To draw Fibonacci Expansion levels on the gold chart 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. Fibonacci Expansion XAUUSD Indicator is drawn using three chart points as illustrated on the Fibonacci expansion xauusd examples displayed below of how to draw the Fibonacci Expansion Gold Indicator Tool.
The Fibo expansion example illustrated & shown below shows 3 XAUUSD Chart Points where the Fibonacci expansion gold 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 xauusd trend pulled back & retraced and XAUUSD Chart point 3 is where the xauusd retracement reached as shown on the Fibonacci Expansion Gold Indicator Tool example shown below.
How Do You Draw Fibonacci Expansion Levels? - How Do You Draw Fibonacci Expansion Levels?
Please note where these Fib Expansion zones are drawn - Fibo Expansion zones are plotted above the Fib xauusd technical indicator, these are the chart points where a trader will set the xauusd take profit orders using these Fib Expansion Levels - 61.80% and 100.00% Fibonacci Expansion Areas.
Drawing Fibonacci Expansion Levels on an Upward Gold Trend
We use Fibo expansion areas to estimate where the market trend movement will get to. There are two commonly used Fibonacci expansion levels: 61.8%Fibonacci Expansion Level and 100% Fibonacci Expansion Level, these Fibonacci Expansion Levels are used for taking profit.
On the Fibonacci expansion indicator example illustrated & shown below you can see that the Fibonacci expansion technical indicator is drawn along the direction of the trend, since the trend is upward - the Fibonacci expansion levels indicator is drawn upwards.
These Fibo expansion levels are displayed as horizontal lines above Fibonacci Expansion gold trading technical indicator, showing xauusd profit taking areas. In the xauusd examples illustrated below if you had used of 100.00% Fibonacci expansion level you would have made nice profit from the trade setup.
Drawing Fibonacci Expansion Levels Gold Indicator on an Upward XAUUSD Trend
From the above Fibonacci expansion indicator examples, the upwards trend continued & both 61.8% & 100.0% Fibonacci expansion levels were all hit after which gold price retraced again after getting to the 100.0% Fibonacci Expansion level.
Drawing Fibo Expansion Levels on a Downwards Gold Trend
Since we use the Fibonacci expansion indicator tool to estimate xauusd take profit levels, how do we draw Fibonacci Expansion in a downward XAUUSD trend?
We draw the Fibonacci expansion tool from chart point 1 to chart point 2 to chart point 3 as illustrated on the Fibonacci expansion xauusd examples illustrated below. Remember we always plot this Fibo expansion tool in direction of the market trend. In the Fibonacci expansion example illustrated and shown below, can you figure what direction we have plotted it? That's right - downward direction.
Try & spot the difference between how we have drawn Fibonacci expansion levels indicator above and how Fibonacci Expansion levels indicator is drawn below. This time you would also have used Fibonacci expansion level 100.0%, just where the price reached as illustrated on the Fibonacci expansion levels xauusd example shown below. This would have been a good xauusd take profit area.
Drawing Fibonacci Expansion Levels Gold Indicator on a Downward XAUUSD Trend
From the Fibonacci expansion levels indicator example above, after drawing this Fibonacci expansion levels xauusd tool there are two levels that are used to show the xauusd profit taking areas - these two Fibonacci expansion levels are drawn as horizontal lines across the gold price chart marked as 61.8% XAUUSD Trading Fib Expansion Level & 100% Fibonacci Expansion Level.
How Do You Draw XAUUSD Trading Fib Expansion Levels?
