How to Trade Retracement on Upward XAUUSD Trend
How Do You Draw Fibonacci Retracement for Gold Uptrend?
The Fibonacci retracement indicator is placed on a xauusd chart in an upward xauusd trending market and this Fibonacci Retracement indicator then calculates the retracement levels for the upward trend on the gold charts. Fibonacci retracement levels indicator is used by many traders as a xauusd retracement indicator.
In the XAUUSD Retracement Strategy example shown below the gold trading price is moving up between chart point 1 and chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then gold trading price continues moving up in the original upward trend. Note that this Fibonacci retracement technical indicator is plotted from point 1 to point 2 in the direction of the trend (Upward Direction).
Because we know this is just a retracement based on our xauusd chart xauusd trend - using this Fibonacci retracement indicator, we put a buy order just between the levels 38.2% and 50.0% retracement levels and our stop loss just below 61.8% retracement level. If you had put a buy at this point in the trade example shown below you would have made a lot of pips after the gold trading price retracement reached the Fib 50.00% level and then continued heading in the original upward trend.
How to Trade XAUUSD Price Retracement on Upwards XAUUSD Trend - Fibonacci Retracement Levels Trading
Explanation for the Above XAUUSD Trading Fib Retracement Strategy Examples
Once the gold trading price hit the 50.0% Fibonacci retracement level, this retracement level provided a lot of support for the gold price, and afterwards the xauusd market then resumed the original upward trend and continued to move upwards.
23.6% Fibonacci retracement level provides minimum support & is not an ideal place to place a gold trade order.
38.2% Fibonacci retracement level provides some support but gold trading price in this example continued to retrace up to the 50% zone.
50.0% Fibo retracement level provides a lot of support and in this example, this was the ideal place to set a buy gold trade order.
For this XAUUSD Retracement Strategy example, the gold trading price retracement reached the 50.0% Fibonacci retracement level, but most of the time the xauusd market will retrace up to 38.2% Fibonacci retracement level and therefore most of the time xauusd traders set their buy limit pending orders at 38.2% Fibo retracement level, while at same time placing a stop just below 61.8% Fibo retracement level.
