Fibonacci Extension XAUUSD Strategy
We use Fibonacci Extension Areas to estimate where the market trend movement will reach. There are Two important Fib Extension areas: 61.80% and 100% Fibonacci Extension Levels, these are used for taking profit.
To draw Fib Extension levels on MT4 gold chart we wait until the gold price retracement is complete & the price starts to move in original direction of the XAUUSD trend. Where the gold price retracement reaches is used as chart point 3. Fibonacci Extension MT4 Indicator is drawn using 3 chart points as shown on the xauusd examples displayed below of how to draw the Fibo Extension Technical Indicator MetaTrader 4 Tool.
The Fibo Extension MetaTrader 4 Indicator example shown below shows the 3 Chart Points where the Fibo Extension MetaTrader 4 technical indicator is plotted, marked as Chart point 1, Chart point 2 & Chart point 3.
Chart point 1 is where the xauusd trend started, Chart point 2 is where the xauusd trend pulled back and retraced & Chart point 3 is where the xauusd retracement reached as shown on the Fibo Extension MetaTrader 4 Indicator Tool example shown below.
Fibonacci Extension Strategy
Fibonacci Extension Strategy - Fibonacci Strategy - Fibonacci Extension XAUUSD Strategy
Please note where these Fib Extension levels are plotted - Fibo Extension zones are plotted above the MT4 Fibonacci technical indicator, these are the chart points where a trader will set the take profit orders using these Fib Extension Levels - 61.8% & 100.0% Fibo Extension Levels.
Upward XAUUSD Trend - Fibonacci Extension Strategy - Fib Strategy - Fibonacci Extension XAUUSD Strategy
We use Fibonacci Extension Areas to estimate where the market trend movement will reach. There are Two important Fibo Extension areas: 61.80%Fibonacci Extension Level and 100% Fib Extension Level, these Fib Extension Levels are used for taking profit.
On the Fibo Extension MetaTrader 4 indicator example illustrated & shown below you can see that the Fibo Extension MetaTrader 4 technical indicator is drawn along the direction of the trend, since the trend is upward - the MetaTrader 4 Fibo Extension technical indicator is plotted upward.
These Fibo Extension zones are displayed as horizontal lines above the Fibo Extension MetaTrader 4 gold technical technical indicator, showing profit taking areas. In the xauusd examples illustrated below if you had used of 100.00% Fibo Extension level the you would have made good profit from this trading setup.
Upward XAUUSD Trend - Fibonacci Extension Strategy
Fibonacci Strategy - Fib Extension XAUUSD Strategy
From the above Fibo Extension MetaTrader 4 indicator examples, the upwards trend continued & both 61.8% & 100.0% Fibo Extension zones were all hit after which gold price retraced again after getting to the 100.00% Fibo Extension level.
Gold Trading Fibonacci Strategy
Since we use the Fibo Extension MetaTrader 4 indicator tool to estimate take profit levels, how do we draw MetaTrader 4 Fibonacci Extension in a downward XAUUSD trend?
We draw the Fibo Extension MT4 indicator from chart point 1 to chart point 2 to chart point 3 as displayed on the xauusd examples illustrated below. Remember we always plot this Fibo Extension MT4 indicator tool in direction of the market trend. In the Fibonacci Extension example shown below, can you figure what direction we have plotted it? That's right - downwards direction.
Try & spot the difference between how we have drawn Fibo Extension indicator above & how Fibo Extension technical indicator is plotted below. This time you would also have used Fibo Extension level 100.0%, just where the price reached as illustrated on the xauusd example shown below. That would have been a good take profit level.
Downward XAUUSD Trend - Fibonacci Extension Strategy
Fib Strategy - Fibonacci Extension Gold Strategy
From the Fibo Extension MetaTrader 4 indicator example above, after drawing this MetaTrader 4 Fibonacci Extension tool there are two levels which are used to show the profit-taking areas, these two Fibonacci Extension levels are plotted as horizontal lines across the gold price chart marked as 61.8%Fibonacci Extension Level and 100% Fib Extension Level.
