Chart Patterns Trading Gold Chart Patterns

Chart patterns are graphical representations of repeating price action formations that are commonly used in the analyzing the online Gold trading market.

Chart patterns is one of the studies used in technical analysis to help traders learn how to recognize these repeating chart formations.

These chart patterns are important in Gold trading because when the market is not moving in a particular direction it is forming a pattern. It is important to know these formations so as to have an idea of what might be the next move in the Gold price movement.

When gold price movements are plotted on a chart there are several formations that occur naturally & repeat themselves over and over again. These formations are used by a lot of technical analysis traders to predict the next likely market movement.

Traders often study these patterns and formations to gauge supply & demand forces that form the basis for XAUUSD price fluctuations.These chart patterns are classified into 3 different categories:

1. Reversal patternsDouble topsDouble bottomsHead and shouldersReverse head & shoulders

2. Continuation chart patternsAscending triangleDescending triangleBull flag/pennantBear flag/pennant

3. Bilateral patternsSymmetric triangle - ConsolidationRectangle - Ranging Market

Reversal patterns - these reversal chart patterns confirm the reversal of the market price trend once the chart pattern setup is confirmed. These patterns are formed after extended market trend either upwards or downward and they signal that the market is ready to reverse the direction.

Continuation patterns - these continuation chart patterns are formations that set up the market for a continuation move in the direction of the prior market trend. These continuation patterns are formed when the market is taking a break before continuing in the same direction of the previous XAUUSD prices trend.

Consolidation patterns - these consolidation chart patterns form when the market is taking a break prior to deciding next direction to move. When these chart patterns are formed the market is trying to determine what direction to trade.

Technical Analysis of Charts

There are two types of chart analysis, these two might seem similar but are not: the two are:

Japanese Candles Patterns - Study of a single candlestick - Read Japanese CandlesticksChart Patterns - Study of a series of candlesticks formations

(This tutorial is about the second option above - chart patterns)

The different lessons for these two types of chart analysis are:

Japanese Candles Patterns

1. Marubozu & Doji Candlesticks Patterns
2. Spinning Top Candlesticks Patterns
3. Reversal Candles Patterns
4. Inverted Hammer & Shooting Star Candlesticks Patterns
5. Piercing Line & Dark Cloud Cover Candlesticks Patterns
6. Morning Star & Evening Star Candlesticks Patterns

Chart Patterns Tutorials

1. Double Tops & Double Bottoms Chart Patterns
2. Continuation Patterns
3. Consolidation Chart Patterns
4. Head & Shoulders and Reverse Head and Shoulders Patterns

The examples below also illustrate the difference of the formations of these two technical analysis methods.

Candlesticks Patterns - Study of a single candle

Candlesticks Pattern

Patterns - Study of a series of candlesticks formation

Consolidation Chart Pattern - Trading Gold Using Chart Patterns