Definition of Reversal Chart Patterns

Reversal Patterns confirm the reversal of the xauusd market trend once this reversal chart pattern setup is confirmed.

These reversal patterns are formed after extended gold market trend either upwards or downwards & these reversal chart patterns signal that the xauusd market trend is ready to reverse.

1. Reversal Trading Patterns

• Double Tops Reversal Chart Patterns

• Double Bottom Reversal Patterns

• Head and Shoulders Reversal Chart Patterns

• Reverse Head and Shoulders Reversal Chart Patterns

Double Tops

Double tops xauusd pattern is a reversal pattern that is formed after an extended upward xauusd trend. As its name implies, this pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough between.

Summary:

• Double tops xauusd chart pattern forms after an extended move upwards
• Double tops xauusd pattern formation indicates that there will be a reversal in the xauusd market
• We sell when the price breaks out below neck line point: see below for an explanation.

Example of Double Tops Reversal Chart Pattern on a Gold Chart

Double Bottoms

Double bottoms xauusd pattern is a reversal pattern that is formed after an extended downward xauusd trend. It is made up of 2 consecutive troughs that are roughly equal, with a moderate peak between.

Summary:

• Double bottoms xauusd chart pattern forms after an extended move downward
• Double bottoms xauusd pattern formation indicates that there will be a reversal in the xauusd market
• We buy when price breaks out above neck-line point: see below for an explanation.

Example of Double Bottoms Reversal Chart Pattern on a Gold Chart

Head & Shoulders Chart Pattern

Head and Shoulders pattern is a reversal pattern which forms after an extended Gold Trading upward 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.

Summary:

• Head & Shoulders pattern forms after an extended move upward
• Head & Shoulders pattern formation indicates that there will be a reversal in the xauusd market
• Head & Shoulders xauusd trading pattern formation resembles head with shoulders thus its name.
• To draw the neck-line we use chart point 1 & point 2 as shown below. We also extend this line in both directions.
• We sell when the price breaks out below the neck line point: see the trading chart below for explanation.

Examples of Head & Shoulders Reversal Chart Pattern on a Gold Chart

Reverse Head and Shoulders Chart Pattern

Reverse Head and Shoulders pattern is a reversal head & shoulders chart pattern which forms after an extended Gold Trading downward xauusd trend. It resembles an upside down head shoulders.

Summary:

• Reverse Head and Shoulders pattern forms after an extended move downward
• Reverse Head and Shoulders pattern formation indicates that there will be a reversal in the xauusd market
• Reverse Head and Shoulders xauusd pattern formation resembles upside-down, thus the name Reverse.
• We buy when price breaks-out above neck line point: see the trading chart below for explanation.

Example of Reverse Head and Shoulders Reversal Chart Pattern on a Gold Chart

Reversal Chart Patterns Lessons

Double Tops Chart Patterns & Double Bottom Chart Patterns

Head and shoulders XAUUSD Chart Patterns & Reverse Head & Shoulders Chart Patterns