How to Trade a Down Gold trend Reversal
How to Trade Downwards Gold Trend Reversal: How to Identify a Gold Downwards Trend Reversal Trading Signal
Down XAUUSD trend Gold Trading Reversal
When xauusd price breaks out above the downward gold trend-line (resistance) xauusd trading price will then move up
How to Trade Downwards Gold Trend Reversal: How to Identify a Gold Downwards Trend Reversal Trading Signal
XAUUSD Down Trend Line Break
After xauusd price has moved in a down gold trend direction for an extended period of time within a gold down trend it reaches a point where it stops moving within the downward xauusd trend. When this happens we say that the down gold trend line has been broken & this is interpreted as a down gold trend reversal signal.
Since the downward gold trend line is the point of resistance and this point of resistance has been broken after a gold trend-line break - we then expect the xauusd price to move towards the opposite direction upwards and this is interpreted as a down gold trend reversal signal.
When this happens gold traders will close the open gold sell orders which they had sold. This is referred to as taking profit.
This down gold trend reversal signal is considered to be confirmed with the creation of higher low. This down gold trend reversal trading setup also provides a trading opportunity to open a buy gold trade once the down gold trend line is broken - down gold trend line reversal xauusd trading signal.
NB: Sometimes when price breaks its down gold trend it might first of all consolidate before moving in the opposite direction. Either way it is always good to take profit when the xauusd market trend reverses.
To trade this down gold trend reversal setup as a trader once you open a new gold trade in the direction of the market trend reversal the xauusd price should immediately move upwards in that direction, in a xauusd price breakout manner. This means that the xauusd prices should immediately move upwards in that direction of the reversal gold signal without much of a resistance.
If on the other hand the xauusd prices do not immediately move in the upwards direction of the xauusd price breakout then it is best to close out the buy gold trade because it means that the down gold trend is still holding.
Another tip is to wait for the downward trend line to be broken & for the xauusd market to close above it so as to confirm this down gold trend reversal signal.
What happens is that most traders open trades waiting for a gold trading reversal even before the down gold trend is broken, only for the xauusd price to touch this downwards trend line & for the current market down gold trend direction to hold and gold to continue with the current market down xauusd trend.
Therefore, when trading this down gold trend reversal setup it is best to wait until the xauusd price breakout has been confirmed by xauusd price closing above the trend line.
- Downwards Market Gold Trend Direction Reversal - this down gold trend reversal signal is confirmed once the xauusd price closes above the downwards gold trend-line, this should be the correct time to open a buy gold trade, so as to avoid a gold trading whipsaw.
