Different Type of Market Analysis

What's 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 that 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 trading set-ups requires a different type of analysis.

In the xauusd 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 as illustrated in the illustration below. If as a trader your chart breaks an upward gold trend line to the upward side in an up moving market like 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 Up Movement

Using the same technical 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 depicted as the xauusd trading price progresses.

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

This forms gold trend B and C as illustrated in the illustration below portrayed using the MT4 analysis software, The momentum added a new steeper line as depicted on this chart.

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

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

How to Trade These in Gold Trading

The momentum gold trend lines are good technical analysis tools for determining where to take profit early before the other traders. This momentum trading pattern occurs frequently on 1 min, 5 minute & 15 mins charts & therefore suitable for scalpers & day traders. For day trading which is most common? - the best chart to use is 15 mins sometimes 5 mins, for example after opening a short-term trade position either buy/sell and the xauusd 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 take the profit.

Trading the Momentum Market Moves

In the above example 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 trade 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 xauusd trading prices is pushed vertically. During a parabolic up move, there is almost complete absence of sellers, which forms a vacuum of buying. When this occurs traders dash to just get in to the xauusd market regardless of xauusd trading price, in fear of being left backwards. This move can make the largest xauusd trading price moves 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 the end of a move with xauusd trading prices not returning to the ultimate peaks again for a long time. When this level is reached and the most steep most gold trendline is broken it is best to consider that as a gold trend reversal and it's best to take time off the xauusd 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 xauusd price is also pushed vertically. This especially happens during recession.

The steeper a gold trendline angle, the less dependable it becomes. When the most steep is broken its best to exit this trade transaction. The example illustrated and explained below is for crude oil that has shaped a parabolic setup. Another example is gold that formed on the weekly/monthly chart during the period shortly after the steepest line in the crude oil 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 will 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 steep most line is over because the reversal on this xauusd pattern is very quick you need to also be very fast. Just make sure that you get out at the correct spot just like in the above examples.