How to Trade Retracement on Upwards Gold Trend
How Do I Draw Fibonacci Retracement for Gold Uptrend?
The Fibonacci retracement indicator is placed on a gold chart in an upward gold trending market and this Fibonacci Retracement indicator then calculates the retracement levels for the upward xauusd trend on the gold charts. Fibonacci retracement levels indicator is used by many traders as a gold trading retracement trading indicator.
In the Gold Retracement Strategy example illustrated and explained below the xauusd trading price is moving up between chart point 1 & chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then xauusd trading price continues moving up in the original upward trend. Note that this Fibonacci retracement technical indicator is drawn from point 1 to point 2 in direction of the Gold trend (Upward Direction).
Because we know this is just a retracement based on our gold chart gold trend - using this Fibonacci retracement indicator, we put a buy order just between the levels 38.2% and 50.0% retracement levels and our stop loss just below 61.8% retracement level. If you had put a buy at this point in the trade example illustrated and explained below you would have made a lot of pips after the xauusd trading price retracement reached the Fibonacci 50.00% level and then continued heading in the original upward trend.
How to Trade Gold Price Retracement on Upwards Gold Trend - Fibonacci Retracement Levels Trading
Explanation for the Above XAUUSD Fibo Retracement Strategy Examples
Once the xauusd trading price hit the 50.0% Fibonacci retracement level, this retracement level provided a lot of support for the xauusd price, and afterwards the xauusd market then resumed the original upward trend & continued to move upward.
23.60% Fibonacci retracement level provides minimum support and is not an ideal place to set a xauusd trade order.
38.2% Fibonacci retracement level provides some support but xauusd trading price in this example continued to retrace up to the 50% zone.
50.0% Fibo retracement level provides a lot of support & in this example, this was the ideal place to set a buy xauusd trade order.
For this Gold Retracement Strategy example, the xauusd trading price retracement reached the 50.0% Fibonacci retracement level, but most of the time the xauusd market will retrace up to 38.2% Fibonacci retracement level and therefore most of the time gold traders set their buy limit pending orders at the 38.2% Fib retracement level, while at the same time placing a stop just below 61.8% Fib retracement level.
