How to Draw Gold Trading Fib Extension on Upward Gold Trend
Drawing Fibo Extension Zones on an Upwards Gold Trend
We use Fibo Extension Levels to estimate where the trend movement will reach. There are 2 commonly used Fibo Extension levels: 61.80% XAUUSD Fibo Extension Level and 100% Fibo Extension Level, these Fib Extension Levels are used for setting take profit levels.
On the Fibonacci Extension indicator example illustrated and explained below you can see that the Fibonacci Extension technical indicator tool is plotted along the direction of the trend, since the trend is up - the Fibonacci Extension technical indicator is drawn upwards.
These Fibonacci Extension levels are shown as horizontal lines above the Fib Extension technical indicator, showing the profit taking areas. In the xauusd trading examples illustrated & described below if you had used the 100.00% Fibo Extension level you would have made a good profit from this setup.
How to Draw Gold Trading Fib Extension on Upward Gold Trend
From the above Fibonacci Extension indicator tool example, the upward trend continued and both 61.8% & 100.00% Fibo Extension levels were all hit after which the xauusd trading price retraced again after getting to the 100.00% Fibonacci Extension level.
From the Fibonacci Extension tool example above, after plotting this Fibonacci Extension tool there are 2 levels that are used to show the profit taking areas, these 2 Fibonacci Extension areas are drawn as horizontal lines across the gold chart marked as 61.8% XAUUSD Fibo Extension Level and 100% Fibonacci Extension Level.
Explanation of How to Draw Fibonacci Extension Levels on Gold Charts
We use Fibonacci Extension Levels to estimate where the trend movement will reach. There are 2 important Fibonacci Extension levels: 61.80% and 100% Fibonacci Extension Areas, these are used for taking profit.
To draw Fibonacci Extension 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 Extension Indicator is plotted using 3 chart points as illustrated on the xauusd trading examples illustrated and described below of how to plot the Fib Extension Technical Indicator Tool.
The Fibonacci Extension example explained below shows the 3 Chart Points where the Fibonacci Extension 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 displayed on the Fibonacci Extension Technical Indicator Tool examples illustrated and described below.
How to Draw Fibo Extension Indicator on Upwards Gold Trend
Please note where these Fib Extension areas are drawn - Fibo Extension zones are drawn above the Fibonacci technical indicator, these are chart points where a trader will set take profit orders using these Fibonacci Extension Levels - 61.8% & 100.0% Fibo Extension Areas.
