How to Trade with Fibonacci Retracement
Fibonacci Retracement is an indicator used in xauusd to calculate gold price retracement levels in an upward or a downwards gold trend.
Fibo retracement levels are used by traders to place gold trades and open gold trades at a better price after gold price has resumed moving in the original xauusd trend direction after retracing.
What are XAUUSD Trading Fib Retracement Zones?
- 23.6% XAUUSD Trading Fib Retracement
- 38.2% XAUUSD Trading Fib Retracement
- 50.0% XAUUSD Trading Fib Retracement
- 61.80% Fibo Retracement
38.2% & 50.0% Fibonacci Retracement Levels are most commonly used
most of the times this is where price retracement will reach - with 38.2% Fibonacci Retracement Level being the most popular & most widely used retracement level in xauusd.
61.8% Fibonacci Retracement Level is also commonly used to set stop loss for trades opened using this xauusd retracement strategy.
What is Fibonacci Retracement Strategy using Fibonacci Retracement Levels?
What is Fibonacci Retracement Strategy using Fibonacci Retracement Levels?
Fibo Retracement Strategies in Gold - Fibonacci Retracement Technical Indicator Tool Explained
Fibo Retracement Strategies in Gold - Fibonacci Retracement Technical Indicator Tool Explained
How Do You Draw XAUUSD Trading Fib Retracements?
Fibonacci Retracement Levels tool is plotted in direction of the trend as shown in two Fib retracement example below:.
Upward XAUUSD Trend Trading Strategy
In the technical analysis example illustrated & shown below the gold 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 gold price continues moving up in original upward trend. Note that this retracement indicator is plotted from point 1 to point 2 in the direction of the trend (Upward Direction).
Fibonacci Retracement in an Up XAUUSD Trend
Fibonacci Retracement Strategy using Fibonacci Retracement Levels in an Up XAUUSD Trend
Once the gold price hit the 50.0% retracement level, this retracement level provided a lot of support for the gold price, & afterwards xauusd market then resumed the original upward trend and continued to move upwards.
For this Fibonacci retracement strategy example, the gold 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 xauusd traders set their buy limit orders at the 38.2% Fibonacci retracement level, while at the same time placing a stop just below 61.8% Fibonacci retracement level.
Downward Gold Trend Trading Strategy
In the Fibonacci retracement strategy example shown below the xauusd market is heading down between chart point 1 & chart point 2, then after chart point 2 the gold price then retraces up to 38.2% retracement level then it continues moving downwards in the original downward trend. Note that this retracement indicator is plotted from point 1 to point 2 in the direction of the trend (Downward Direction).
Fibonacci Retracement in a Down XAUUSD Trend
Fibonacci Retracement Strategy using Fibonacci Retracement Levels in a Down XAUUSD Trend
The above Fibonacci retracement strategy examples is a xauusd retracement trading set up where the price retraces immediately after touching the 38.20% Fibonacci Retracement Level.
In this Fibo retracement strategy example the retracement of gold price reached 38.20% retracement level and did not get to 50.00% retracement level. It is always good to use 38.2% retracement level because most times the gold price retracement doesn't always get to 50.00% retracement level.
This XAUUSD Retracement level provided a lot of resistance for the gold price retracement, this was the best place for a trader to set a sell limit order as a xauusd market quickly moved down after hitting this gold price retracement level.
