Different Type of Market Analysis

What is a Momentum Trend?

A momentum gold trend is one which has more strength than the earlier one, it can be depicted using a more steeper gold trend line than the one which was in place before. When a new line forms that's more steeper than a previous one we say that the gold trend has gathered extra strength & becomes much stronger. These types of set-ups requires a different type of analysis.

In the example illustrated & explained below: Also when the price is moving up within a channel, if it breaks the upward channel a stronger gold trend is shaped such as illustrated in the illustration revealed below. If as a trader your chart breaks an upward gold trend line to the upward side in an up moving market such as the one below, Do-not Try to Sell, Buy More Contracts, Remember this gold trading tip it can make you a lot of money like the way it did in analysis below.

Channel Break Up - More Strength on the Upward Movement

Using the same trading analysis examples above we can also see how new steeper trendlines were shaped showing the gold trend was gathering momentum.

This is illustrated by the steeper trend-lines which can be illustrated as the price progresses.

The newly initiated gold trend has more strength than the previous one like displayed by the forming of the steeper trendline.

This forms gold trend B and C such as illustrated in the illustration below portrayed using the MetaTrader 4 analysis software, The force added a new steeper line as depicted on this chart.

This is shown in the trading example illustrated & explained below by the three trend lines A, B & C showing setup formation of stronger price trends as the market continues to garner force.

Price Gathering More Momentum

However, when the steepest gold trendline is broken then even others trendlines will most likely be broken too. It's best to take profit once the steep most trendline is broken.

This trading strategy can also be used by short term gold traders such as and like the intra-day trader or the scalper trader, this setup will frequently form on the 5 min and 15 min chart. This parabolic trend-lines can be used to know where to set takeprofit. One should immediately take his profit as soon as the steep most trendline is broken.

How Do I Trade These in Gold Trading

The momentum gold trend lines are good technical analysis tools for figuring out where to take profit early before the other traders. This momentum trading pattern formation occurs frequently on 1 min, 5 minute & 15 mins charts & therefore suitable for scalpers & day traders. For intra-day trading which is most common? - the best chart to use is 15 minutes sometimes 5 minute, for example after opening a short-term trade either buy/sell and the market moves some pips in your favor & you identify this pattern then it's best to exit once the steepest trendline is broken and take profit at that point.

Technical Analysis Examples

For this example we shall use the short-term chart of minutes for plotting, when the pattern showed up as below, it was a good place to book the profit.

Trading the Momentum Market Moves

In the above example illustration a trader trading long would have waited until the steep most trend line was broken then closed the trade and taking profit at this place thus making profit of 42 pips on this buy gold trade. One would have exited the position at the best time & thus avoiding the choppy gold market that followed.

What's Gold Parabolic Trend?

Sometimes a market moves in a parabolic manner, & this is seen when panic buying sets in and trading prices is pushed vertically. During a parabolic up move, there's almost complete absence of sellers, which forms a vacuum of buying. When this occurs, traders dash to just get into the market regardless of price, in fear of being left backwards. This move can make the largest trading price movements in the shortest amount of time, traders will put buy trade orders in this gold trade setup.

For this type of move it is best to keep opening buy - no need for analysis just keep opening buy.

This gold trend will last for even months on end even upto two years, for this time just keep opening buy and as long as those week & monthly gold trend lines are holding just keep opening buy and buying.

When gold moves in this manner, the highest level that is attained often marks and highlights the end of a move with market prices not returning to the ultimate highs again for a long time. When this level is reached and the most steep most gold trendline is broken it's best to consider that as a market trend reversal and it's best to take time off the market & enjoy your trading profits for sometime before calculating your next move.

The same can also happen for a down gold trend when there is panic selling and price also is pushed vertically. This especially happens during recession.

The steeper a trend line angle, the less dependable it becomes. When the most steep is broken its best to exit this trade. The example illustrated and explained below is for crude oil that has shaped a parabolic setup. Another illustration is gold that occurred on the weekly/monthly chart during the period shortly after the steep most line in the oil trade chart was broken.

As a trader if you happen-to come across a parabolic gold trend in an upward trend just keep opening buy and buying some more & you'll more likely to make profits trading this direction, there will be no added technical analysis requirement just the trend lines. The one thing to remember is to exit once the steepest trend line is over because the reversal on this pattern formation is very quick you need to also be very fast. Just make sure that you exit at the correct spot just like in the above illustrations.

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