What is the Difference between XAUUSD Fibo Retracement & Gold Fibonacci Expansion?

XAUUSD Trading Fib Retracement Areas

Fibo retracement is drawn between 2 chart points but Fib expansion is plotted using three chart points.

Fibonacci Retracement example shown below where the xauusd trend is heading downwards between Chart point 1 and Chart point 2, then after Chart point 2 the gold price retraces then it continues moving up in the original upward trend. Note that this Fibonacci Retracement indicator is drawn from Chart point 1 to Chart point 2 in the direction of the trend.

Fibonacci Retracement Levels - How to Draw Fibo Retracement Zones

XAUUSD Trading Fib Expansion Levels

Fibo retracement is drawn between 2 chart points but Fib expansion is plotted using three chart points.

To draw these Fibonacci Expansion levels we wait until the gold price retracement is complete & the price starts to move in original direction of the XAUUSD trend. Where the retracement reaches is used as chart point 3 for Fibonacci expansion.

The Fibonacci Expansion example shown below shows the 3 chart Points where the Fibonacci Expansion indicator is drawn, marked as chart point 1, 2 and 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 retracement reached as illustrated and shown on the Fibonacci Expansion example shown below.

Fibonacci Expansion Levels - How to Draw Fibo Expansion Levels

Please note where these Fibo Expansion zones are drawn - Fibonacci Expansion zones are plotted above the Fibonacci Expansion indicator, these are the points where a trader will place the takeprofit orders.