How to Draw Fibonacci Extension on Up XAUUSD Trend
Drawing Fib Extension Zones on an Upward XAUUSD Trend
We use Fibo Extension Levels to estimate where the trend movement will reach. There are 2 oftenly used Fibo Extension areas: 61.8%Fibonacci Extension Level and 100% Fib Extension Level, these Fibonacci Extension Levels are used for setting take profit areas.
On the Fibonacci Extension indicator example illustrated & shown below you can see that the Fibonacci Extension technical indicator is drawn along the direction of the trend, since the trend is up - the Fibonacci Extension technical indicator is plotted upwards.
These Fib Extension levels are shown as horizontal lines above the Fib Extension technical indicator, showing the profit-taking areas. In the xauusd examples shown below if you had used of 100.0% Fibonacci Extension level you would have made a nice profit from using this setup.
How to Draw XAUUSD Fib Extension on Upward XAUUSD Trend - How to Draw Fibonacci Extension on Up XAUUSD Trend
From the above Fibonacci Extension indicator tool example, the upward trend continued and both 61.8% & 100.00% Fibo Extension levels were all hit after which the gold trading price retraced again after getting to the 100.0% Fibonacci Extension level.
From the Fibonacci Extension tool example above, after drawing this Fibonacci Extension tool there are 2 levels which are used to show the profit-taking areas, these 2 Fibonacci Extension areas are plotted as horizontal lines across the gold chart marked as 61.8%Fibonacci Extension Level and 100% Fib Extension Level.
Explanation of How to Draw Fib Extension Levels on XAUUSD Charts
We use Fibonacci Extension Areas to estimate where the trend movement will reach. There are 2 important Fib Extension areas: 61.8% and 100% Fibonacci Extension Areas, these are used for taking profit.
To draw Fibonacci Extension 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 Extension Indicator is drawn using 3 chart points as shown on the xauusd examples displayed below of how to draw the Fibo Extension Technical Indicator Tool.
The Fibo Extension example displayed below shows the 3 Chart Points where the Fibonacci Extension 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 Extension Technical Indicator Tool example shown below.
How to Draw Fib Extension Gold Indicator Tool on Upwards XAUUSD Trend
Please note where these Fibonacci Extension levels are plotted - Fibonacci Extension zones are drawn above the 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.
