How to Draw XAUUSD Fib Expansion on Downward XAUUSD Trend
Drawing Fibo Expansion Levels on a Downward XAUUSD Trend
We draw the Fib Expansion indicator from chart point 1 to chart point 2 to chart point 3 as displayed on the xauusd examples shown below. Remember we always plot this Fibonacci Expansion tool in the direction of the trend. In the Fibonacci Expansion example shown below, can you figure what direction we have plotted it? That's right - downwards direction.
As a trader you would also have used Fibonacci Expansion level 100.0%, just where the price reached as illustrated on the Fibonacci Expansion example shown below. That would have been a good take profit area.
How to Draw XAUUSD Fib Expansion on Downward XAUUSD Trend - How to Draw Fibonacci Expansion on Down XAUUSD Trend
From the Fibonacci Expansion tool example above, after drawing this Fibonacci Expansion indicator tool there are 2 levels that are used to show the profit taking levels, these two Fibo Expansion zones are drawn as horizontal lines across the gold chart marked as 61.8%Fibonacci Expansion Level and 100% Fibo Expansion Level.
Explanation of How to Draw Fib Expansion Levels on XAUUSD Charts
We use Fibonacci Expansion levels to estimate where the trend movement will reach. There are 2 commonly used Fibo Expansion areas: 61.8% Fibonacci Expansion Level and 100% Fibonacci Expansion Areas, these are used for setting taking profit areas.
To draw Fibonacci Expansion levels on the gold chart we wait until the gold price retracement is complete and the gold price starts to move in original direction of the XAUUSD trend. Where the gold price retracement reaches is used as chart point 3. Fibonacci Expansion Indicator tool is drawn using three chart points as shown on the xauusd examples displayed below of how to draw the Fib Expansion Technical Indicator Tool.
The Fibonacci Expansion example shown below shows the 3 Chart Points where the Fibonacci Expansion 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 displayed on the Fibonacci Expansion Indicator Tool example shown below.
How to Draw Fib Expansion Gold Indicator Tool on Downwards XAUUSD Trend
Please note where these Fib Expansion zones are drawn - Fibo Expansion zones are drawn above the Fib technical indicator, these are the chart points where a trader will set the take-profit orders using these Fibonacci Expansion Levels - 61.8% Fibonacci Expansion Level and 100.0% Fibo Expansion Level.
