How to Draw Gold Trading Fib Expansion on Downward Gold Trend
Drawing Fibonacci Expansion Levels on a Downward Gold Trend
We draw the Fibonacci Expansion indicator tool from chart point 1 to chart point 2 to chart point 3 as shown on the xauusd trading example illustrated and explained below. Remember we always draw this Fibonacci Expansion tool in the direction of the trend. In the Fibonacci Expansion example illustrated and explained below, can you figure what direction we have drawn it? That is right - downward direction.
As a gold trader you would also have used Fibonacci Expansion level 100.0%, just where the price reached as shown 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 Downward Gold Trend
From the Fibonacci Expansion indicator tool example above, after drawing this Fibonacci Expansion indicator tool there are two levels that are used to show the profit taking levels, these two Fibonacci Expansion levels are drawn as horizontal lines across the gold chart marked as 61.8% XAUUSD Trading Fib Expansion Level and 100% Fibonacci Expansion Level.
Explanation of How to Draw Fibonacci Expansion Levels on Gold Charts
We use Fibonacci Expansion levels to estimate where the trend movement will reach. There are 2 commonly used Fibonacci Expansion levels; 61.8% Fibonacci Expansion Level and 100% Fibonacci Expansion Levels, these are used for setting taking profit levels.
To draw Fibonacci Expansion levels on the gold chart we wait until the xauusd trading price retracement is complete and the xauusd trading price starts to move in the 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 example illustrated and explained below of how to draw the Fibonacci Expansion Indicator Tool.
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, Chart point 2 and Chart point 3.
Chart point 1 is where the gold trend started, Chart point 2 is where the gold trend pulled back and retraced and Chart point 3 is where the gold retracement reached as shown on the Fibonacci Expansion Indicator Tool example illustrated and explained below.
How to Draw Fibonacci Expansion Technical Indicator on Downwards Gold Trend
Please note where these Fibonacci Expansion levels are drawn - Fibonacci Expansion levels are drawn above the Fibonacci indicator, these are the chart points where a trader will set the take profit orders using these Fibonacci Expansion Levels - 61.8% Fibonacci Expansion Level and 100.0% Fibonacci Expansion Level.
