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