How to Draw Fibonacci Gold Projection Indicator
How Do I Use Fibonacci Projection Zones in Chart?
We use Fibonacci Projection levels to try to estimate where the trend move will reach and get to. There are Two critical Fibonacci Projection levels: 61.80% and 100 % Fibonacci Projection Levels, these are used for booking profit.
To plot Fibonacci Projection areas on the chart we wait til the price retracement is complete & price begins to head in original and initial direction of trend. Where the price retracement reaches is used as point 3. Fibonacci Projection Indicator is drawn using Three chart points like as shown & displayed on the illustrations illustrated and shown & described below of how to draw the Fib Projection IndicatorTool.
The Fibonacci Projection exemplification explained below shows the 3 Points where the Fib Projection indicator is drawn, labeled as Point 1, Chart point two and Chart point 3.
Point 1 is where trend started, Point 2 is where trend pulled back & retraced & Chart point 3 is where the market retracement reached just as displayed on the Fibonacci Projection Indicator example illustration depicted and described below.
How Do You Trade with Fibonacci Projection? - How to Draw Fibonacci Projection Areas on Charts
Please note where these Fibonacci Projection levels are drawn - Fibonacci Projection levels are drawn above Fibonacci indicator, these are the chart areas where a gold trader will set the take-profits using these Fib Projection Levels - 61.80 % & 100.00 % Fib Projection Zones.
Drawing Fibonacci Projection Zones on an Upwards Trend
We use Fibonacci Projection levels to try to project where the trend move will reach and get to. There are Two critical Fibonacci Projection levels: 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Level, these Fibonacci Projection Levels are used for booking profit.
On the Fibonacci Projection indicator illustration depicted & explained below you can see that the Fibonacci Projection technical tool is drawn along the direction of the trend, since the trend is upwards - the Fibonacci Projection indicator is drawn upward.
These Fib Projection levels are displayed as horizontal lines above Fibonacci Projection technical indicator, showing profit taking zones. In the examples shown/illustrated & explained below if you had used the 100.00 percent Fibonacci Projection level the you'd have made nice profit from the Gold trade setup.
Drawing Fibonacci Projection Indicator on an Upwards Trend - Fibonacci Projection Tool
From the above Fibonacci Projection indicator example illustration, the upward trend continued and both 61.80% & 100.00% Fibonacci Projection levels were all hit after which xauusd gold price retraced again after getting to the 100.0% Fibonacci Projection level.
Drawing Fibonacci Projection Levels on a Down-wards Trend
Since we use the Fib Projection technical tool to estimate take-profit levels, how do we draw Fib Projection in a downward trend?
We draw the Fibonacci Projection indicator from chart point 1 to chart point 2 to chart point Three just as is shown & illustrated in exemplification depicted & explained below. Remember we always draw this Fibonacci Projection tool in the direction of the trend. In the Fibonacci Projection exemplification depicted and explained below, can you figure what direction we've drawn it? That's right - downwards direction.
Try & spot the difference between how we have plotted Fibonacci Projection indicator above and how Fibonacci Projection indicator is drawn below. This time you'd also have used Fibonacci Projection area 100.0%, just where the price reached like displayed on the example illustration illustrated and described below. That would have been a good takeprofit level.
Drawing Fibonacci Projection Indicator on a Downwards Trend - Fibonacci Projection Tool
From the Fibonacci Projection indicator illustration above, after drawing this Fibonacci Projection tool there are two levels which are used to show the booking profit zones, these two Fibonacci Projection levels are drawn as horizontal lines across the price chart marked as 61.8 % Fib Projection Level & 100% Fib Projection Level.
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