How to Draw XAUUSD Trading Fib Expansion
How Do I Use Fibonacci Expansion Levels on XAUUSD Chart?
We use Fibo Expansion levels to estimate where the trend movement will reach. There are Two important Fibonacci Expansion levels: 61.8% & 100% Fibo Expansion Levels, these are used for taking profit.
To draw Fibonacci Expansion levels on the gold chart we wait until the xauusd price retracement is complete & the xauusd price starts to move in original direction of the Gold trend. Where the xauusd trading price retracement reaches is used as chart point 3. Fibonacci Expansion Technical Indicator is plotted using 3 chart points as displayed on the xauusd trading examples illustrated and described below of how to plot the Fibonacci Expansion Technical Indicator Tool.
The Fib Expansion example illustrated and displayed below shows the 3 Chart Points where the Fibonacci Expansion technical indicator is drawn, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the gold trend started, Chart point 2 is where the gold trend pulled back and retraced & Chart point 3 is where the gold retracement reached as illustrated on the Fibonacci Expansion Indicator Tool example illustrated & explained below.
How to Trade with Fibonacci Expansion? - How to Draw Fibonacci Expansion Levels on Gold Charts
Please note where these Fibonacci Expansion zones are plotted - Fibonacci Expansion zones are drawn above the Fibonacci technical indicator, these are chart points where a trader will set take profit orders using these Fibonacci Expansion Levels - 61.80% and 100.00% Fibonacci Expansion Levels.
Drawing Fibonacci Expansion Levels on an Upward Gold Trend
We use Fibonacci Expansion levels to estimate where the trend movement will reach. There are Two important Fibonacci Expansion levels: 61.8% XAUUSD Trading Fib Expansion Level & 100% Fibonacci Expansion Level, these Fibonacci Expansion Levels are used for taking profit.
On the Fibonacci Expansion indicator example illustrated and explained below you can see that the Fibonacci Expansion technical indicator tool is plotted along the direction of the trend, since the trend is upward - the Fibonacci Expansion indicator is drawn upwards.
These Fibo Expansion levels are shown as horizontal lines above the Fib Expansion technical indicator, showing profit-taking areas. In the xauusd examples described below if you had used 100.00% Fibonacci Expansion level you would have made a good profit from this trade setup.
Drawing Fibo Expansion Indicator on an Upward Gold Trend - Fibo Expansion Tool
From the above Fibonacci Expansion indicator example, the upward trend continued and both 61.8% & 100.00% Fibonacci Expansion levels were all hit after which xauusd price retraced again after getting to the 100.00% Fibonacci Expansion level.
Drawing Fibo Expansion Areas on a Downwards Gold Trend
Since we use the Fibonacci Expansion indicator tool to estimate take profit levels, how do we draw Fibonacci Expansion in a downward Gold trend?
We draw the Fibonacci Expansion indicator from chart point 1 to chart point 2 to chart point 3 as shown on the xauusd example illustrated and described below. Remember we always draw this Fibonacci Expansion tool in the direction of the trend. In the Fibonacci Expansion example illustrated and described below, can you figureout what direction we have drawn it? That's right - downward direction.
Try and identify the difference between how we have plotted Fibonacci Expansion indicator above and how Fibonacci Expansion indicator is drawn below. This time you would also have used Fibonacci Expansion level 100.0%, just where the price reached as illustrated on the xauusd trading examples illustrated and described below. That would have been a good take profit area.
Drawing Fibo Expansion Indicator on a Downwards Gold Trend - Fibo Expansion Tool
From the Fibonacci Expansion indicator example above, after plotting this Fibonacci Expansion tool there are 2 levels that are used to show the profit taking areas, these two Fibo Expansion zones are plotted as horizontal lines across the xauusd trading price chart marked as 61.80% XAUUSD Fibo Expansion Level and 100% Fibonacci Expansion Level.
