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 and 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 chart patterns and formations to gauge supply and demand forces that form the basis for Gold price fluctuations.
These chart patterns are classified into 3 different categories:

 

1. Reversal chart patterns
Double tops
Double bottoms
Head and shoulders
Reverse head and shoulders

 

2. Continuation chart patterns
Ascending triangle
Descending triangle
Bull flag/pennant
Bear flag/pennant

3. Bilateral chart patterns
Symmetric triangle - Consolidation
Rectangle - Range Market

 

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

Continuation chart 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 chart patterns are formed when the market is taking a break before continuing in the same direction of the previous Gold prices trend.

Consolidation chart patterns - these consolidation chart patterns form when the market is taking a break before deciding the next direction to take. When these chart patterns are formed the market is trying to decide which direction to trade.

 

 

Technical Analysis of Charts

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

Japanese Candlesticks Patterns - Study of a single candlestick - Read Japanese Candlesticks
Chart Patterns - Study of a series of candlesticks formations

 

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

 

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

 

Japanese Candlesticks Patterns

1. Marubozu & Doji Candlesticks Patterns
2. Spinning Tops Candlesticks Patterns
3. Reversal Candlesticks 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 and Double Bottoms Chart Patterns
2. Continuation Chart Patterns
3. Consolidation Chart Patterns
4. Head and Shoulders and Reverse Head and Shoulders Chart Patterns

 

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

Candlesticks Patterns - Study of a single candlestick

Candlesticks Pattern

 

Chart Patterns - Study of a series of candlesticks formation

Consolidation Chart Pattern - Trading Gold Using Chart Patterns