Chart Patterns Trading Gold Setups

Chart patterns are graphical representations of repeating price action formations and setups which are often used in the analyzing the online Gold trading market.

Chart patterns is one of the studies used in technical analysis to help Gold traders learn how to identify these repeating chart setups.

These chart patterns are important in Gold trading because when the market is not heading in a certain direction it is forming a pattern. It's important to know these formations so as to have an idea of what may be the next move in the Gold price movement.

When xauusd gold price moves are drawn on a chart there are various formations and setups that occur naturally and repeat themselves over and over again. These setups are used by a lot of technical analysis traders to forecast and predict the next likely market move.

Traders often study these patterns and formations and setups to gauge supply and demand forces which form the basis for XAUUSD Gold price fluctuations and oscillations. These patterns are classified in to 3 different categories:

1. Reversal chart patternsDouble topsDouble bottomsHead & shouldersReverse head and shoulders

2. Continuation chart patternsAscending triangle and Descending triangle - Bull pennant/flag and Bear pennant/flag

3. Bilateral patternsSymmetric triangle - ConsolidationRectangle - Ranging Market

Reversal patterns - these reversal chart patterns confirm the reversal of the market trend once the setup is confirmed. These patterns are formed after extended price trend either upwards or downward and they signal that the market is ready to reverse the direction.

Continuation patterns - these continuation chart patterns are formations that set-up the market for a continuation move in the direction of the prior trend. These continuation patterns are formed when the market is taking a break before continuing in the same direction of the previous XAUUSD Gold prices trend.

Consolidation patterns - these consolidation chart patterns form when the market is taking a break prior to deciding next trend direction to head. When these chart patterns form, the market is trying to figure out what direction to take.

Analysis of Charts

There are two types of chart analysis in trading, these two might seem similar but aren't: the two are:

Japanese Candles Patterns - Study of a single candle - Read Japanese CandlesticksPatterns - Study of a series of candlesticks formations

(This tutorial is about the second option above - patterns)

The different topics for these two types of chart analysis are:

Japanese Candles Patterns

1. Marubozu & Doji Candles Patterns
2. Spinning Tops Candlesticks Patterns
3. Reversal Candlesticks Patterns
4. Inverted Hammer & Shooting Star Candlesticks Patterns
5. Piercing Line & Dark Cloud Candles Patterns
6. Morning Star & Evening Star Candlesticks Patterns

Chart Patterns Guides

1. Double Tops and Double Bottoms Setups
2. Continuation Patterns
3. Consolidation Setups
4. Head Shoulders & Reverse/Inverse Head & Shoulders Setups

The illustrations below also indicate the difference of the setups of these two technical analysis methods.

Candles Patterns - Study of a single candle

Candles Pattern

Chart Patterns - Study of a series of candlesticks formation

Consolidation Pattern - Trading XAUUSD Using Patterns

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