This document discusses how to use Fibonacci retracement and expansion levels to analyze upward and downward trends in gold prices on the MetaTrader 4 platform. It explains how to draw Fibonacci retracement levels between two points on a chart to identify likely pullback zones for a resuming trend. It also discusses how to draw Fibonacci expansion levels between three points to identify potential profit targets. The document provides examples of applying these techniques to both upward and downward gold price trends and describes how to insert the Fibonacci tools on MetaTrader 4.

1. UPWARD , DOWNWARD& META TRADER4 PLATFORM

2. POINTS TO BE COVERED TODAY:
Drawing Fibonacci Retracement Levels on Upward and Downward Gold Trend
Draw Fibonacci Retracement Levels on MetaTrader 4 Platform
Drawing Fibonacci Expansion Levels on Upward and Downward Gold Trend
How to Draw Fibonacci Retracement Levels on MetaTrader 4 Platform
Gold Price & Chart

3. Drawing Fibonacci Retracement Levels On Upward
And Downward Gold Trend
The price of a XAUUSD metal does not move up or down in a straight line.
Instead price of Gold moves up or down in a zigzag pattern.
 Fibonacci Retracement is the tool used to calculate where the zigzag will
stop.
The pullback levels are 38.2%, 50% and 61.8%. These form the points at
which the market is likely to make a retracement.
A retracement is a pullback of the price before the market resumes the
original trend/original direction of movement.

4. Drawing Fibonacci Retracement Levels On Upward
And Downward Gold Trend - I
The diagram shows this movement in an
upward trending market.
1-2: Price moves up
2-3: Pullback
3-4: Moves up
4-5: Pullback
5-6: Moves up
Since we can spot where a pullback starts
on a Gold price chart, how do we know
where these pullbacks/retracements will
reach?
The answer is we use Fibonacci
retracement levels.
This is a type of line study used in Gold
trading to predict and calculate the price
retracement levels.
 This indicator is placed directly on the
price chart within the trading platform
provided by your online broker, This
Fibonacci retracement levels indicator will
then automatically calculate these
retracement levels on the chart.

5. What Are The Fibonacci Retracement
Levels?
23.6 % Fibonacci retracement level
38.2 % Fibonacci retracement level
50.0 % Fibonacci retracement level
61.8 % Fibonacci retracement level
38.2 % and 50.0 % Retracement Levels are the most commonly used and
most of the time this is where the pullback will reach - with 38.2 % Fibonacci
retracement level being the most popular and the most widely used.
61.8% Fibonacci retracement level is also commonly used to set stops for
trades opened using this strategy - because price retracement will not get to
this retracement level most of the time.

6. How To Draw Fibonacci Retracement Levels On
An Upward Market Trend
In the diagram below the Gold price is moving up between 1 and 2 then after 2
it retraces down to 50.0% Fibonacci retracement level pull back area then it
continues moving up in the original upward trend.
Notice that this indicator is drawn from point 1 to point 2 in the direction of the
Gold price trend (Upward trend).
Because we know this is just a retracement/pullback based on our using this
indicator - Fibonacci retracement level, we put a buy order just between the
levels 38.2% and 50.0% retracement levels and our stop loss just below 61.8%
pull back level.
 If you had put a buy at this point in the trade example below you would have
made a lot of pips as shown below.

7. Fibonacci Retracement Levels Drawn On An
Upward Gold Price Trend

8. Explanation For The Above Fibonacci
Retracement Setup Trade Example
Once the Gold price hit the 50.0 % Fibonacci retracement level, this zone
provided a lot of support for the price, and afterwards the market then
resumed the original upward trend and continued to move up.
23.6 % Fibonacci retracement level provides minimum support and is not an
ideal place to place an order.
38.2 % Fibonacci retracement level provides some support but price in this
example continued to retrace up to the 50 % retracement level. Most of the
times traders will place their buy limit orders at this level - 38.2 % Fibonacci
retracement level.
50.0 % Fibonacci retracement level provides a lot of support and in this
example, this was the ideal place to place a buy order.

9. How To Draw Fibonacci Retracement Levels On
A Downward Market Trend
In the diagram the market is moving down between 1 and 2, then
after 2 it retraces up to 38.2% Fibonacci retracement level and then it
continues moving down in the original downward trend.
Notice that this Fibonacci retracement indicator is drawn from point 1
to point 2 in the direction of the Gold price trend (Downward trend).
Because we know this is just a pullback we put a sell order at 38.2%
Fibonacci retracement level and a stop loss just above 61.8% Fibonacci
retracement level.
If you had put a sell order at the 38.2 % Fibonacci retracement level
as shown on the trade below you would have made a lot of pips
afterwards.
In this trade the retracement reached 38.2% Fibonacci retracement
level and did not get to 50.0% Fibonacci retracement level. From
experience it is always good to use 38.2% Fibonacci retracement level
when trading XAUUSD metal because most times the pullback does
not always get to 50.0% retracement mark.

10. How To Draw Fibonacci Retracement Levels On
MetaTrader 4 Platform
To calculate these price pullbacks on the Gold price chart for example
the MetaTrader 4 platform we use Fibonacci retracement levels tool/indicator
as shown on the image below.
If you want to analyze some Gold price charts using this tool, it is already
provided for in the MT4 platform, the following procedure is used to add this
tool on the MetaTrader 4 Software.
On The MT4 this Fibonacci retracement tool will automatically draw the
retracement levels on a price chart once this indicator is placed on the Gold
price chart.

11. How To Place Fibonacci Retracement On A
Gold Price Chart
To Place this Fibonacci Retracement Levels tool on a price chart, click on
the button shown above on the MetaTrader 4 platform.
 Then select 2 chart points, the first point is where the trend starts and the
second point is where the trend pullback starts.
To adjust this indicator just double click on it and adjust points will appear
on the point 1 and 2 - shown as small squares, click and hold your mouse
button to move these points to where you want them to be placed exactly.
 You can practice using this Fibonacci Retracement Levels tool by using a
practice Gold trading demo account.

12. Drawing Fibonacci Expansion Levels On
Upward And Downward Gold Trend
We have looked at Fibonacci retracement in the previous learn Gold
trading lesson, drawn between 2 chart points.
But to plot Fibonacci expansion levels we use 3 chart points.
To draw these levels we wait until the retracement is complete and
the XAUUSD metal starts to move in the original direction of the Gold
price trend. Where the retracement reaches is used as point 3.

13. Fibonacci Expansion Levels
The example below shows the 3
Points where the Fibonacci
extension levels indicator is drawn -
marked as 1, 2 and 3.
Point 1 is where the trend started,
Point 2 is where the trend started to
be pulled back and retraced and
Point 3 is where the retracement
reached as shown on the example
below.
Please note where these Fibonacci
expansion levels are plotted - they
are drawn above the indicator, these
are the points where the trader will
set the take profit orders.

14. Drawing Fibonacci Expansion Levels On An
Upward Gold Price Trend
We use Fibonacci extension levels to
estimate where the movement will
reach.
There are 2 important extension
levels; 61.8 % Fibonacci expansion
level and 100 % Fibonacci expansion
level, these levels are used for taking
profit.
On the example below you can see
that the Fibonacci extension is plotted
along the direction of the trend, since
the trend is upward - the Fibonacci
expansion is plotted upwards.
These Fibonacci expansion levels are
displayed as horizontal lines above the
indicator, showing profit taking areas.
In the example below if you had used
of 100 % extension you would have
made nice profit from the buy trade.

15. Drawing Fibonacci Expansion Levels On A
Downward Gold Price Trend
We plot Fibonacci expansion levels indicator from point 1 to 2 to 3 as shown
below.
 Remember we always plot this tool in the direction of the trend. In the
example below, can you figure what direction we have drawn it? That is right
- downwards because the trend is downwards.
Try and see the difference between how we have drawn it above and how it
is drawn below. This time you would also have used Fibonacci extension level
100 %, see just where the price reached. That would have been a nice take
profit area.

16. Fibonacci Expansion Levels Drawn on a
Downward Gold Price Trend
From the example in the
chart, after plotting this
Fibonacci expansion tool
there are two levels that
are used to show the profit
taking areas, these two
levels are plotted as
horizontal lines across the
price chart (these levels
are 61.8 % Fibonacci
expansion level and 100 %
Fibonacci expansion level
as shown above).

17. How to Draw Fibonacci Retracement Levels on
MetaTrader 4 Platform
To calculate these price pullbacks on the Gold price chart for example the MetaTrader 4
platform we use Fibonacci retracement levels tool/indicator as shown on the image below.
If you want to analyze some Gold price charts using this tool, it is already provided for in
the MT4 platform, the following procedure is used to add this tool on the MetaTrader 4
Software.
On The MT4 this Fibonacci retracement tool will automatically draw the retracement levels
on a price chart once this indicator is placed on the Gold price chart.
To add this tool on the MetaTrader 4 software, you can use the following shortcut method:
Click Insert
Click Fibonacci
Click Retracement

18. How to Place Fibonacci Retracement on a Gold
Price Chart
To Place this Fibonacci Retracement Levels tool on a price
chart, click on the button shown above on the MetaTrader 4
platform.
Then select 2 chart points, the first point is where the trend
starts and the second point is where the trend pullback starts.
To adjust this indicator just double click on it and adjust points
will appear on the point 1 and 2 - shown as small squares, click
and hold your mouse button to move these points to where you
want them to be placed exactly.

19. Gold Price & Chart

20. UPWARD , DOWNWARD& META TRADER4 PLATFORM