XAUUSD Break Out Strategy Indicators
With consolidation patterns the market can go in any direction after a gold price breakout. Consolidation xauusd setups are used to spot break-out setups in charts. There are 2 types of consolidation patterns that form on charts:
- Symmetric Triangles - Consolidation Patterns
- Rectangle Patterns - Range Gold Setup Patterns
Consolidation Chart Setup Patterns
Symmetrical triangles are patterns with converging trend lines that form a gold price consolidation period that signals there's going to be a gold price break out in one direction after this chart pattern setup breaksout in one direction. The buy signal from a consolidation triangle is the upside gold price break, while a down-side gold price break is a sell signal. Ideally, a the price breaks-out from a consolidation chart pattern setup prior to reaching the apex of the triangle.
XAUUSD Trend lines trend lines can be plotted connecting the lows and highs of the consolidation pattern for the price, the trend lines formed are consolidation and converge to form an apex - consolidation triangle pattern. A price break out should occur somewhere between 60% & 80 % into the triangle consolidation pattern. An early or late xauusd trading break-out is more prone to whipsaws, and therefore less reliable. After a gold price breakout to one side the apex of the consolidation triangle forms the support and resistance levels for the price. Price that has broken out of the consolidation chart pattern setup shouldn't retrace past the apex. The apex is used as a stoploss setting level for the open trade transactions set after a gold price break out.
When consolidation patterns form we say that the market is taking a break before deciding the next direction to take - this also signals an impending price breakout - XAUUSD Break Out Strategy Indicators - Gold Break-out Indicator - Indicator To Confirm Breakout.
These trading consolidation patterns form when there is a tug of war between buyers & sellers & the market can't decide which way to proceed.
Consolidation Patterns - XAUUSD Break Out Strategy Indicators - XAUUSD Break Out Indicator
However, this consolidation pattern can not go on forever - the chart example below displays how the consolidation chart pattern setup eventually had a gold price breakout & moved in one direction.
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XAUUSD Break Out Indicator - Indicator To Confirm Break-out - XAUUSD Breakout Signal Indicator
After gold price consolidating, If gold price breaks out the upper line we open buy trades, if gold price breaks out the lower line we open-sell trades.
Range Pattern
A rectangle consolidation chart pattern setup is a range with a thin price action that develops into a consolidation phase in market. The range is defined by two parallel trend lines which are horizontal & these indicate the presence of support and resistance levels at this particular area. Range consolidation chart pattern is plotted on a chart using a rectangle, therefore, the name rectangle chart pattern.
For this consolidation pattern setup, price forms a series of highs and lows that can be connected with horizontal trend lines that are parallel to each other. Range consolidation chart pattern setup occurs over an extended period of time giving this chart pattern setup its rectangle shape.
A xauusd break-out of gold price action from the rectangle consolidation chart pattern setup forms when either of the horizontal line is penetrated and the range of this rectangle pattern setup is broken. An upside gold price break out is a buy signal. A downside gold price break out is a sell signal.
Range Chart Pattern - XAUUSD Break Out Strategy Indicators - Indicator To Confirm Breakout
XAUUSD Price BreaksOut of rectangle consolidation range after a period of time & price continues to move up-ward after an up-ward gold price break out.
XAUUSD Break Out Strategy Indicators - Gold Break-out Indicator - XAUUSD Breakout Signal Indicator
