What's Difference between Fib Retracement and Fibonacci Expansion?

XAUUSD Fibonacci Retracement Levels

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

Fibo Retracement example shown & described below where the trend is moving down between Chart point 1 & Chart point 2, then after Point 2 the price retraces then it continues moving up in the original up-wards trend. Note that this Fibo Retracement indicator is drawn from Chart point 1 to Chart point two in the direction of the trend.

How to Use Fibonacci Retracement Levels Indicator on MT5 Platform

Fibo Retracement Levels - How to Draw Fibonacci Retracement Zones

Gold Fibo Extension Levels

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

To draw these Fibo Expansion areas we wait until the price retracement is complete and the price starts to head in original direction of trend. Where the retracement reaches is used as chart point 3 for Fib expansion.

The Fibo Expansion example shown & described below displays the 3 chart Points where the Fibo Expansion indicator is plotted, labeled as point 1, 2 & 3. Point 1 is where trend started, Point 2 is where trend pulled back & retraced and Chart point 3 is where the retracement reached as shown and illustrated on Fibo Extension example shown and explained below.

How to Draw Fib Indicator on Down Trend Trading Price Chart

Fibo Expansion Levels - How to Draw Fibo Extension Levels

Please note where these Fibo Expansion levels are drawn - Fibo Extension levels are drawn above the Fib Expansion indicator, these are the points where a trader will place the take profits.

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What's Difference between Fib Retracement and Fibonacci Expansion?

XAUUSD Fibonacci Retracement Levels

Gold Fibo Extension Levels