Why Do We Use Gold Trend Lines?

Gold traders use gold trend lines in xauusd trading analysis because gold prices move in gold trends and the best gold trading tool to interpret these gold trend are the gold trend lines that are to indicate the direction of the gold trend either upwards or downwards.

Gold trend lines are also commonly used by gold traders because they are the most simple form of technical analysis that is used by many xauusd traders to determine where to open buy or sell xauusd trades.

Gold Trend lines work by indicating the support levels of gold prices or the resistance levels of gold prices.

Gold Trading gold prices move in a series of support and resistance levels and these series of support and resistance pattern then forms a general market direction either upwards or downwards.

Traders use gold trend lines to depict these patterns on the xauusd price charts as shown on the xauusd trading example illustrated and explained below:

Minor Resistance/Support levels

In minor resistance and support points the xauusd price will quickly form these points in the short term and quickly move past these resistance and support points during a xauusd trend.

Upward Gold Trend: The upward gold trend pattern of this minor resistance and support points will form a series of levels whose general direction is upwards.

Upward Gold Trend Series of Support and Resistance - Why Do We Use Gold Trend Lines?

Downward Gold Trend: The gold trend pattern of this minor resistance and support points will form a series of levels whose general direction is downwards.

Downward Gold Trend Series of Support and Resistance - Why Do We Use Gold Trend Lines?

Traders then analyze these gold trend line using gold trend line technical analysis to determine when and where to open a buy or a sell gold trade depending on the direction of the gold trend line.