What's Difference between XAUUSD Fibo Retracement and XAUUSD Fibonacci Expansion?

Gold Trading Fib Retracement Levels

Fibonacci retracement is drawn between 2 chart points but Fibonacci expansion is drawn using 3 chart points.

Fibonacci Retracement example illustrated and explained below where the gold trend is moving down between Chart point 1 & Chart point 2, then after Chart point 2 the xauusd price retraces then it continues moving up in the original upwards trend. Note that this Fibonacci Retracement indicator is drawn from Chart point 1 to Chart point 2 in the direction of the trend.

Fibo Retracement Levels - How to Draw Fibonacci Retracement Zones

Gold Trading Fibonacci Expansion Levels

Fibonacci retracement is drawn between 2 chart points but Fibonacci expansion is drawn using 3 chart points.

To draw these Fibonacci Expansion levels we wait until the xauusd price retracement is complete & the price starts to move in original direction of the Gold trend. Where the retracement reaches is used as chart point 3 for Fibonacci expansion.

The Fibonacci Expansion example illustrated and explained below shows the 3 chart Points where the Fibonacci Expansion indicator is drawn, marked as chart point 1, 2 and 3. Chart point 1 is where the gold trend started, Chart point 2 is where the gold trend pulled back & retraced and Chart point 3 is where the retracement reached as shown and illustrated on Fibonacci Expansion example illustrated & described below.

Fibo Expansion Levels - How to Draw Fibonacci Expansion Levels

Please note where these Fibo Expansion zones are drawn - Fibo Expansion zones are plotted above the Fib Expansion indicator, these are the points where a trader will place the take-profit orders.