Gold Retracement Strategy
How Do I Use Trading Fibonacci in XAUUSD Trading?
A good gold trading retracement strategy to use is the fibonacci retracement indicator. Fibonacci retracement indicator is used by many traders as a gold trading retracement strategy indicator.
The fibonacci retracement indicator is placed on a gold chart and this Fibonacci Retracement indicator then calculates the retracement levels on the xauusd charts.
Fib Retracement Strategy Examples on Upward XAUUSD Trend and Downwards Gold Trend
XAUUSD Retracement Strategy
In the Gold Retracement Strategy example illustrated and explained below the xauusd 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 price continues moving up in the original upwards trend. Note that this retracement indicator is drawn from point 1 to point 2 in direction of the Gold trend (Upwards Direction).
Because we know this is just a retracement based on our gold chart gold trend - using this retracement indicator, we put a buy order just between the levels 38.2% and 50.0% & our stoploss just below 61.8% pull back mark. If you had put buy at this point in trade example illustrated and explained below you would have made a lot of pips after the price retracement reached the Fibonacci 50.0% level and then continued moving in the original upwards trend.
How to Trade Retracement on Upwards Gold Trend - Gold Retracement Strategy
Explanation for the Above Gold Retracement Strategy Example
Once the xauusd price hit the 50.00% retracement level, this retracement level provided a lot of support for xauusd price, & afterwards xauusd market then resumed the original upwards trend & continued to move upward.
23.60% retracement level provides minimum support & isn't an ideal place to place a xauusd trade order.
38.2% retracement level provides some support but xauusd price in this example continued to retrace up to the 50% zone.
50.00% 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 price retracement reached the 50.0% retracement level, but most of the time the xauusd market will retrace up to 38.2% retracement level and therefore most of the time gold traders set their buy limit pending orders at the 38.2% Fibonacci retracement level, while at the same time placing a stop just below 61.8% Fibonacci retracement level.
XAUUSD Retracement Strategy
In the Gold Retracement Strategy example illustrated and explained below the xauusd market is heading downwards between chart point 1 and chart point 2, then after chart point 2 the xauusd price then retraces up to 38.2% retracement level then it continues moving downwards in original downwards trend. Note that this retracement indicator is drawn from point 1 to point 2 in direction of the Gold trend (Downwards Direction).
Because we know this is just a retracement based on the gold chart gold trend we put a sell order at 38.2% retracement level and a stop loss just above 61.8% retracement level.
If you had put sell order at the 38.2% retracement level as shown on the trade below you would have made a lot of pips afterwards after the price reached the 38.2% retracement level and then resumed the downward xauusd trend.
In this trade the retracement of xauusd price reached 38.2% retracement level & did not get to 50.0% retracement level. It is always good to use 38.20% retracement level because most times the xauusd price retracement does not always get to 50.00% retracement level.
How to Trade Retracement on Downwards Gold Trend - Gold Retracement Strategy
Explanation for the Above Gold Retracement Strategy Example
The above Gold Retracement Strategy examples is a gold retracement trading set up where the price retraces immediately after touching the 38.20% XAUUSD Chart Fibo Retracement Level.
This Gold Retracement level provided a lot of resistance for the xauusd price retracement, this was the best place for a trader to set a sell limit pending order as a xauusd market quickly moved down after hitting this retracement level.
