Fibonacci Ratios Gold Trading Analysis and Trading Signals

Derived from the original Bollinger bands.

The Bollinger Fib ratios is a volatility based indicators but it doesn't use the standard deviations to calculate the width of the bands instead it uses a smoothed ATR that are multiplied with Fibo ratios of 1.618, 2.618, & 4.236.

The smoothed lines that are multiplied with Fibonacci ratios are then added or subtracted from the moving average.

This forms Three upper Fibo bands & Three lower Fibo bands

The middle band forms the basis of the market trend.

Gold Analysis and Generating Trading Signals

This gold indicator used to determine point of support and resistance for gold.

Lines below represent support points while those above are resistance zones.

Outermost bands provide the strongest resistance/support.

The inner most bands provide least support/resistance.

The innermost band represents Fibo 38.2% retracement level

The second band represents Fib 50% retracement level

The outermost band represents Fib 61.80% retracement level

The indicator is used to determine points where xauusd price might reverse. (Gold Price Pullback Levels)

When xauusd price hits one of the lines & reverses then an entry or exit signal is generated.

However, it's always good to combine the signal with other confirmation indicators such as the moving average to confirm the signal as shown below.

Technical Analysis in Gold Trading