How to Draw Gold Trading Fib Projection on Downward Gold Trend
Drawing Fibonacci Projection Levels on a Downward Gold Trend
We draw the Fibonacci Projection 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 Projection tool in the direction of the trend. In the Fibonacci Projection 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 Projection level 100.0%, just where the price reached as shown on the Fibonacci Projection example illustrated and explained below. That would have been a good take profit area.
How to Draw Gold Trading Fib Projection on Downward Gold Trend
From the Fibonacci Projection indicator tool example above, after drawing this Fibonacci Projection indicator tool there are two levels that are used to show the profit taking levels, these two Fibonacci Projection levels are drawn as horizontal lines across the gold chart marked as 61.8%Fibonacci Projection Level and 100% Fibonacci Projection Level.
Explanation of How to Draw Fibonacci Projection Levels on Gold Charts
We use Fibonacci Projection levels to estimate where the trend movement will reach. There are 2 commonly used Fibonacci Projection levels; 61.8% Fibonacci Projection Level and 100% Fibonacci Projection Levels, these are used for setting taking profit levels.
To draw Fibonacci Projection 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 Projection 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 Projection Indicator Tool.
The Fibonacci Projection example illustrated and explained below shows the 3 Chart Points where the Fibonacci Projection 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 Projection Indicator Tool example illustrated and explained below.
How to Draw Fibonacci Projection Technical Indicator on Downwards Gold Trend
Please note where these Fibonacci Projection levels are drawn - Fibonacci Projection levels are drawn above the Fibonacci indicator, these are the chart points where a trader will set the take profit orders using these Fibonacci Projection Levels - 61.8% Fibonacci Projection Level and 100.0% Fibonacci Projection Level.
