How Do I Trade Reversal Chart Pattern?
Reversal Patterns confirm the reversal of the xauusd market trend once this reversal pattern setup is confirmed.
How to Trade the Reversal Chart Patterns
These reversal patterns are formed after extended gold market trend either upward or downwards & these reversal chart patterns signal that the xauusd market trend is ready to reverse.
Reversal Chart Patterns
- Double Top Reversal Chart Patterns
- Double Bottom Reversal Chart Patterns
- Head & Shoulders Reversal Chart Patterns
- Reverse Head & Shoulders Reversal Chart Patterns
Double Top Chart Pattern Technical Analysis
Double tops xauusd chart pattern is a reversal pattern that is formed after an extended upwards xauusd trend. As its name implies, this pattern is made up of 2 consecutive peaks that are roughly equal, with a moderate trough between.
How to Analyze Double Tops Reversal Chart Patterns
Double tops xauusd pattern formation is considered complete once xauusd trading price makes the second peak & then penetrates the lowest point between the highs, known as the neck line. The sell signal from this formation occurs when the xauusd market breaks-out below the neckline.
In Gold, double tops pattern formation is used as a early warning signal that a bullish Gold trend is about to reverse. However, it is only confirmed once the neckline is broken and the xauusd market moves below the neck-line. Neckline is just another name for the last support level formed on the Gold chart.
Summary:
- Double tops xauusd chart pattern forms after an extended move upwards
- Double tops xauusd chart pattern formation indicates that there will be a reversal in the xauusd market
- We sell when the price breaks-out below neckline point: see below for explanation.
How to Interpret Double Top Reversal Chart Patterns? - Double Tops Technical Analysis
Double Bottom Chart Pattern Technical Analysis
Double bottoms xauusd pattern is a reversal pattern that is formed after an extended downward xauusd trend. It is made up of two consecutive troughs that are roughly equal, with a moderate peak between.
How to Analyze Double Bottoms Reversal Chart Patterns
Double bottoms xauusd pattern formation is considered complete once xauusd trading price makes the second low & then penetrates the highest point between the lows, known as the neck line. The buy indication from this bottoming out signal occurs when the xauusd market breaks-out the neck line to the upside.
In Gold, double bottoms pattern formation is an early warning signal that the bearish Gold trend is about to reverse. It is only considered complete/completed once the neck-line is broken. In this formation the neckline is the resistance level for the xauusd price. Once this resistance is broken the xauusd market will move up.
Summary:
- Double bottom xauusd trading pattern forms after an extended move downward
- Double bottom xauusd chart pattern formation indicates that there will be a reversal in the xauusd market
- We buy when price breaks-out above neckline point: see below for the explanation.
How to Interpret Double Bottoms Reversal Chart Patterns? - Double Bottom Technical Analysis
Head & Shoulders Chart Pattern Technical Analysis
Head & Shoulders pattern is a reversal pattern which forms after an extended Gold Trading upwards xauusd trend. It is made up of three consecutive peaks, the left shoulder, the head & the right shoulder with 2 moderate troughs between the shoulders.
How to Analyze Head and Shoulders Reversal Chart Patterns
Head & Shoulders chart pattern is considered to be complete once xauusd price penetrates below the neckline, which is drawn by joining the two troughs between the shoulders pattern.
To go short, Gold traders place their sell stop orders just below neck line.
Summary:
- Head and Shoulders pattern forms after an extended move upward
- Head & Shoulders chart pattern formation indicates that there will be a reversal in the xauusd market
- Head & Shoulders xauusd pattern formation resembles head with shoulders thus its name.
- To draw the neck-line we use chart point 1 and point 2 as shown below. We also extend this line in both directions.
- We sell when the price breaks below the neck line point: see the chart below for explanation.
How to Interpret Head and Shoulders Reversal Patterns? - Head & Shoulders Technical Analysis
Reverse Head and Shoulders Chart Pattern Technical Analysis
Reverse Head & Shoulders pattern is a reversal head and shoulders chart pattern which forms after an extended Gold Trading downwards xauusd trend. It resembles an upside-down head shoulders.
How to Analyze Reverse Head and Shoulders Reversal Chart Patterns
Reverse Head & Shoulders chart pattern is considered to be complete once xauusd price penetrates above neckline, which is drawn by joining these 2 peaks between the reverse shoulders pattern.
To go long buyers place their buy stop pending orders just above neckline.
Summary:
- Reverse Head & Shoulders pattern forms after an extended move downward
- Reverse Head and Shoulders chart pattern formation indicates that there will be a reversal in the xauusd market
- Reverse Head and Shoulders xauusd trading pattern formation resembles upside down, thus the name Reverse.
- We buy when price breaks out above the neck line point: see the chart below for explanation.
How to Analyze Reverse Head and Shoulders Reversal Patterns? - Inverse Head & Shoulders Technical Analysis
How to Analyze Reversal Patterns - Reversal Chart Patterns
