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