How to Trade a XAUUSD Downtrend
Down Gold trend is when price of a gold chart is moving lower & lower. Gold Trading xauusd prices generally close lower than where they opened.
How to Trade Downwards Gold Trend: Gold traders use the downwards gold trend direction to open sell gold trades
Drawing a Downward Gold Trendline
When it comes to learning how to draw a downward gold trend line, you need to know that when the xauusd market is bearish it forms lower lows & lower highs forming a downwards general gold trend direction - downwards xauusd trend. These are the points that are used to draw a downward gold trend line.
To draw downwards gold trend setup we use resistance levels and to do it correctly two resistance levels are needed. When xauusd trading price touches this downward trend line, then we open sell xauusd trades & place stop loss just a few pips above the sloping resistances:
How to Trade a Downtrend? - Strategy for Trading a Gold Downward Trend
Trading This Down XAUUSD Trend Market Move
When trading with this down gold trend method, this downward trend setup will show the general direction of the market as downwards therefore gold traders will only open short sell xauusd trades. These resistance levels are the levels where if xauusd trading price retraces then these points will provide strong resistance. This is why many gold sellers will wait until xauusd trading price retraces upward & hits these retracements levels to open sell xauusd trades. Trades opened at these levels have a high Reward to Risk Ratio and have little drawdown.
For Example, in the above downwards gold trend example, a trader would have opened short sell signals at the resistance 1, resistance 2, resistance 3 and these sell xauusd trades would have been opened with minimum amount of draw down/retracement.
How to Draw a Downwards XAUUSD Channel
A downwards gold channel is drawn by plotting a line that is parallel to the downwards gold trendline & then adjusting it to touch the bottom boundary of the xauusd price movement. This then forms a channel and as long as the trading price stays between these 2 channels the general market down gold trend direction is intact the xauusd market direction will continue being bearish.
How to Draw a Downward Gold Channel - Gold Downward Trend Trading Strategy
Trading the Downwards XAUUSD Channel
The downward gold channel is used by traders to show levels where it best to take profits. Traders will take some profit once the xauusd trading price touches the lower channel or the lower channel and wait for another retracement before opening a short sell gold trade again.
