Reversal XAGUSD Trading Patterns

These patterns are formed after the xagusd trading market has had an extended move up or down and the xagusd price reaches a strong resistance or support respectively.

When xagusd price reaches such a point it starts to form a pattern. Since these formations are frequently formed it's easy to spot them once you learn how & begin using them. There are four types:

• Double Top
• Double Bottom
• Head & shoulders
• Reverse Head and shoulders

This learn silver trading tutorial will only cover double tops and bottoms, for the other 2, read this other tutorial: head & shoulders and reverse head & shoulders

Double Tops

This is a reversal silver trading pattern that forms after an extended upwards silver trend. As its name implies, this formation is made up of 2 consecutive peaks that are roughly equal, with a moderate trough between.

This formation is considered complete once xagusd trading price makes the second peak & then penetrates the lowest point between the highs, called the neck line. The sell silver signal from this formation occurs when the xagusd trading market breaks below the neck-line.

In Silver, this formation is used as a early warning trading signal that a bullish silver trend is about to reverse. However, it is only confirmed once the neckline is broken and the xagusd trading market moves below the neckline. Neckline is just another name for last support level formed on the Silver chart.

Summary:

• Forms after an extended move upwards
• This formation indicates that there will be a reversal in xagusd trading market
• We sell when xagusd price breaks below the neck line point: see below for explanation.

The double top look like an M-Shape, the best reversal silver signal is where the second top is lower than the first one as shown below, this means that the reversal can be confirmed by drawing a downward silver trend line as shown below. If a trader opens a sell silver signal the stop loss will be placed just above this downward silver trend line.

M Shaped

Double Bottoms

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

This formation is considered complete once xagusd trading price makes the second low and then penetrates highest point between the lows, called the neckline. The buy indication from this bottoming out signal occurs when xagusd trading market breaks the neck-line to the upside.

In Silver, this formation is an early warning trading signal that the bearish silver trend is about to reverse. It's only considered complete/confirmed once the neck-line is broken. In this formation the neckline is the resistance level for the xagusd price. Once this resistance is broken the xagusd trading market will move up.

Summary:

• Forms after an extended move downward
• This formation indicates that there will be a reversal in xagusd trading market
• We buy when xagusd price breaks above the neck line point: see below for explanation.

The double bottom pattern look like a W Shape, the best reversal silver trading signal is where the second bottoms is higher than the first one as shown below, this means that the reversal can be confirmed by drawing an upwards silver trend line as shown below. If a trader opens a buy silver signal the stop loss will be placed just below this upward silver trend line.

W Shaped