How Do I Draw Fibonacci Extension Levels on Downward Gold Trend?
How Do I Draw Fibonacci Extension Levels on Downward XAUUSD Trend?
We draw the Fibo Extension indicator tool from chart point 1 to chart point 2 to chart point 3 as displayed on the Fibonacci extension gold example illustrated and explained below. Remember we always draw this Fibonacci Extension tool in 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 - downwards direction.
As a trader you would also have used Fibo Extension level 100.0%, just where the price reached as illustrated on the Fibonacci Extension example illustrated and explained below. That would have been a good gold take profit area.
How Do I Draw Fibonacci Extension Levels on Downward Gold Trend?
From the Fibonacci Extension tool example above, after plotting this Fibonacci Extension indicator tool there are 2 levels that are used to show the gold profit taking levels - these two Fibonacci Extension levels are represented as horizontal lines across the xauusd chart marked as 61.8% Gold Fibo Extension Level and 100% Fibonacci Extension Level.
Interpretation of How Do I Draw Fibonacci Extension Levels on XAUUSD Charts?
Gold traders Fibonacci Extension levels to estimate where the price movement will reach. There are 2 commonly used Fibo Extension levels: 61.80% Fibonacci Extension Level and 100% Fibonacci Extension Levels - these fibonacci extension levels are used for setting gold taking profit levels.
To draw Fibonacci 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 Gold trend. Where the xauusd price retracement reaches is used as chart point 3. Fibonacci Extension Indicator is plotted using 3 chart points as illustrated on the Fibonacci extension gold example illustrated and explained below of how to plot the Fibonacci Extension Technical Indicator.
The Fibonacci Extension example illustrated and explained below shows the 3 XAUUSD Chart Points where the Fibo Extension 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 price pulled back & retraced & XAUUSD Chart point 3 is where the gold retracement reached as displayed on the Fibonacci Extension Indicator example illustrated and explained below.
Interpret & Draw Fibonacci Extension Levels on Downward Gold Trend?
Please note where these Fibo Extension areas are drawn - Fibonacci Extension zones are drawn above the Fibo gold technical indicator, these are chart points where a trader will place gold take-profit orders using these Fibonacci Extension Levels - 61.8% Fibonacci Extension Level and 100.0% Fibonacci Extension Level.
How Do I Draw Fibonacci Extension Levels on Downward Gold Trend
