How to Draw Gold Trading Fib Expansion on Downwards Gold Trend
Drawing Fibo Expansion Areas on a Downwards 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.
As a trader you would also have used Fibonacci Expansion level 100.0%, just where the price reached as illustrated on the Fibonacci Expansion example illustrated and explained below. That would have been a good take profit area.
How to Draw Gold Trading Fib Expansion on Downwards Gold Trend
From the Fibonacci Expansion tool example above, after plotting this Fibonacci Expansion indicator tool there are 2 levels that are used to show the profit taking levels, these two Fibo Expansion zones are plotted as horizontal lines across the gold chart marked as 61.8% XAUUSD Fibo Expansion Level and 100% Fibonacci Expansion Level.
Explanation of How to Draw Fibonacci Expansion Levels on Gold Charts
We use Fibo Expansion levels to estimate where the trend movement will reach. There are 2 commonly used Fibo Expansion levels: 61.8% Fibo Expansion Level and 100% Fibonacci Expansion Levels, these are used for setting taking profit areas.
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 Indicator tool is drawn using three chart points as shown 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 Draw Fib Expansion Indicator on Downwards Gold Trend
Please note where these Fibonacci Expansion zones are plotted - Fibo 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 - 61.8% Fibonacci Expansion Level and 100.0% Fibo Expansion Level.
