How to Draw Fibonacci Gold Trading Projection Indicator

How Do I Use Fibonacci Projection Zones on Chart?

We use Fibonacci Projection levels to estimate where the market trend movement will reach. There are Two critical Fib Projection levels: 61.80% & 100% Fibonacci Projection Levels, these are used for taking profit.

To plot Fib Projection areas on the chart we wait til the price retracement is complete and price starts to head in original direction of trend. Where the price pullback gets-to is used as point 3. Fibonacci Projection Indicator is drawn using Three chart points as shown and illustrated on the examples illustrated and described below of how to draw the Fibonacci Projection IndicatorTool.

The Fibonacci Projection example described below shows the Three Chart Points where the Fibonacci Projection technical indicator is drawn, labeled as Point 1, Chart point two and Chart point 3.

Point 1 is where trend started, Point 2 is where trend pulled back and retraced and Chart point 3 is where the retracement reached as displayed on the Fibonacci Projection Technical IndicatorTool example depicted and explained below.

How Do I Trade with Fibonacci Projection? - How to Draw Fib Projection Areas on Charts

Please note where these Fibonacci Projection levels are drawn - Fibonacci Projection levels are drawn above Fibonacci indicator, these are the chart areas where a trader will set the take-profit orders using these Fib Projection Levels - 61.80% & 100.00% Fibo Projection Zones.

Drawing Fib Projection Zones on an Upwards Trend

We use Fib Projection levels to estimate where the market trend movement will reach. There are Two critical Fib Projection levels: 61.8%Fibonacci Projection Level and 100% Fibonacci Projection Level, these Fibonacci Projection Levels are used for taking profit.

On the Fibonacci Projection technical indicator example depicted and explained below you can see that the Fibonacci Projection technical indicator tool is drawn along the direction of the trend, since the trend is upwards - the Fibonacci Projection technical indicator is drawn upward.

These Fibonacci Projection levels are displayed as horizontal lines above Fibonacci Projection technical indicator, showing profit booking zones. In the examples illustrated and explained below if you had used the 100.00% Fibo Projection level the you would have made nice profit from the trade setup.

Drawing Fib Projection Indicator on an Upwards Trend - Fibonacci Projection Tool

From the above Fibonacci Projection technical indicator example, 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 100.0% Fibonacci Projection level.

Drawing Fib Projection Levels on a Down-wards Trend

Since we use the Fib Projection technical indicator tool to estimate take-profit levels, how do we draw Fibo Projection in a downwards trend?

We draw the Fibonacci Projection technical indicator from chart point 1 to chart point 2 to chart point Three as shown and illustrated on example depicted and explained below. Remember we always draw this Fibonacci Projection tool in the direction of the trend. In the Fibonacci Projection example depicted and explained below, can you figure what direction we have drawn it? That's right - down ward direction.

Try and spot the difference between how we have plotted Fibonacci Projection technical indicator above and how Fib Projection technical indicator is drawn below. This time you'd also have used Fibonacci Projection area 100.0%, just where price reached as shown on the example illustrated & described below. That would have been a good take-profit level.

Drawing Fib Projection Indicator on a Downwards Trend - Fibonacci Projection Tool

From the Fibonacci Projection technical indicator example above, after drawing this Fibonacci Projection tool there are two levels that are used to show the taking profit zones, these two Fib Projection levels are drawn as horizontal lines across the price chart marked as 61.8 %Fibo Projection Level and 100% Fibonacci Projection Level.