How to Draw XAUUSD Fib Projection on Downward XAUUSD Trend
Drawing Fib Projection Levels on a Downwards XAUUSD Trend
We draw the Fibo Projection tool from chart point 1 to chart point 2 to chart point Three as illustrated and shown on xauusd examples shown below. Remember we always plot this Fibo Projection tool in the direction of the market trend. In the Fibo Projection example illustrated & shown below, can you figure what direction we have plotted it? That's right - downward direction.
As a trader you would also have used Fibonacci Projection level 100.0%, just where the price reached as illustrated on the Fibonacci Projection example shown below. That would have been a good take profit area.
How to Draw XAUUSD Fib Projection on Downward XAUUSD Trend - How to Draw Fibonacci Projection on Down XAUUSD Trend
From the Fibonacci Projection technical indicator tool example above, after drawing this Fibonacci Projection technical indicator tool there are 2 levels that are used to show the profit taking levels, these two Fibonacci Projection levels are plotted as horizontal lines across the gold chart marked as 61.80%Fibonacci Projection Level & 100% Fibo Projection Level.
Explanation of How to Draw Fibonacci Projection Levels on XAUUSD Charts
We use Fibo Projection levels to estimate where the market trend movement will get to. There are 2 commonly used Fibonacci Projection levels: 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these are used for setting taking profit levels.
To plot Fibonacci Projection zones on the gold chart we wait until the gold price retracement is complete and the gold price starts to move in original direction of the XAUUSD trend. Where the gold price retracement reaches is used as chart point 3. Fibonacci Projection Indicator tool is drawn using three chart points as shown on the xauusd examples displayed below of how to draw the Fibonacci Projection Technical Indicator Tool.
The Fibo Projection example illustrated & shown below shows the 3 Chart Points where the Fibo Projection technical indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the xauusd trend started, Chart point 2 is where the xauusd trend pulled back and retraced & Chart point 3 is where the xauusd retracement reached as illustrated and shown on the Fibo Projection Indicator example illustrated & shown below.
How to Draw Fib Projection Gold Indicator Tool on Downwards XAUUSD Trend
Please note where these Fibonacci Projection levels are plotted - Fibo Projection levels are plotted above Fibo technical indicator, these are the chart points where a trader will set the take-profit orders using these Fibonacci Projection Levels - 61.8% Fibonacci Projection Level and 100.0% Fibonacci Projection Level.
