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