How Do I Draw Gold Trend Lines Correctly?
How to Draw Gold Trend-Lines Correctly - Detailed Guide on How to Draw Gold Trend Lines Correctly
Principles of How to Draw XAUUSD Trend Lines Correctly
Use gold candlestick charts
- The points used to plot are along the lows of the xauusd price bars in a bullish gold market. An upwards bullish gold trend is defined by higher highs & higher lows.
- The points used to plot are along the highs of the xauusd price bars in a bearish gold market. A downwards bearish gold trend is defined by lower highs & lower lows.
- The points used to draw gold trend lines are extremes points - the high or the low xauusd trading price. These extremes are important because a close beyond the extreme tells gold traders the gold trend might be changing. This is an entry or an exit xauusd trade signal.
- The more often a gold trend line is hit but not broken, the more powerful its gold trend signal.
Example 1: How to Draw Upwards XAUUSD Trend Line Correctly
To draw an upwards gold trend line correctly use 2 support points in a bullish upward gold trend so as to plot the upward trend line & then extend the trend line as shown below. Upward gold trend-line will show the general direction of xauusd trading prices & as long as trading price is above this upward trend line then the upward trend will remain intact - bullish upward xauusd trend.
If xauusd trading prices move below the upwards trend line which is the support level for the bullish upwards gold trend then traders should close all their open xauusd trades - because this might be a gold trend reversal signal. In an upwards gold trend xauusd trading price should generally stay above the support area which is marked by the upward trend line.
How to Draw Gold Trend-Lines Correctly for Upwards Gold Trend
How to Draw Upward Gold Trendline Correctly - How to Draw Gold Trend Lines Correctly
Example 2: How to Draw Downwards XAUUSD Trend Line Correctly
To draw a downwards gold trend line correctly use two resistance points in a bearish downward gold trend so as to plot the downwards gold trend line & then extend the trend line as illustrated below. The downwards gold trend-line will show the general direction of xauusd trading prices & as long as trading price is below this downwards trend line then the downwards gold trend will remain intact - bearish downwards xauusd trend.
If xauusd trading prices move above the downward gold trend line which is the resistance level for the bearish downwards gold trend then traders should close all their open xauusd trades - because this might be a gold trend reversal signal. In an downward gold trend xauusd trading price should generally stay below the resistance area which is marked by the downwards trend line.
How to Draw Gold Trend-Lines Correctly for Downwards Gold Trend
How to Draw Downward Gold Trendline Correctly - How to Draw Gold Trend Lines Correctly
