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Coppock Curve XAUUSD Analysis and Coppock Curve Signals

Created by Edwin Sedgwick Coppock.

This gold tool started as a way to look at Stocks & Commodities, but later it was used for trading XAUUSD.

Coppock Curve Technical Analysis Examples Explained

This is based on trading psychology, the idea that human actions are predictable. Price always changes and moves like a zigzag.

The concept of an adaptation level dictates how the price of gold responds at particular points: stock prices are expected to follow similar or identical behavioral patterns to those observed historically.

Technical Analysis and How to Generate Trading Signals

In the context of xauusd trading, the MA represents the most fundamental form of an adaptive level structure, around which the price tends to oscillate. This oscillation forms the bedrock of this particular technical indicator, which functions as a longer-term oscillating technical tool derived from these adaptive levels (MA), albeit structured differently.

Oscillators typically start by calculating the percentage change of the current trading price compared to a previous price point, where the earlier market price acts as the benchmark (adaptation levels).

Edwin Coppock believed that the feelings of xauusd/gold market traders could be measured by adding up the % changes over the recent past to get a sense of the xauusd market's long-term direction.

For instance, if we analyze trading prices in comparison to a year prior and observe that the xauusd market has increased by 20% this month compared to a year ago, with last month showing a 15% increase over the same period, and previous months reflecting increases of 10%, 7.50%, and 5% respectively, we can conclude that the xauusd/gold market is gaining momentum.

The Coppock Curve can be leveraged to identify basic signals for market reversals at extreme price points. These signals may be further confirmed by examining divergences and XAUUSD trend line breaks.

Implementation

The default settings for this indicator may require fine-tuning to better synchronize with the constantly evolving market dynamics observed in XAUUSD trading.

The Coppock Curve features a zero line for orientation, but this point does not denote a functional adaptation level: it functions strictly as a visual reference marker.

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XAUUSD Broker