Technical Analysis Consolidation Chart Pattern in XAUUSD
To trade consolidation chart patterns in xauusd traders need to learn about the technical analysis of consolidation trading pattern.
Consolidation Trading Patterns
Consolidation gold trading chart patterns are xauusd chart patterns with converging xauusd trend lines that form a gold price consolidation period.
The technical buy point from a consolidation chart pattern is the upside breakout of gold price
While a downside breakout of gold price is a technical sell signal.
Ideally, a market breaks out from a symmetrical triangle prior to reaching apex of the triangle.
XAUUSD Trendlines can be drawn connecting the lows and highs of the consolidation phase, the trend lines formed are symmetric and converge to form an apex.
A gold price breakout should occur somewhere between 60-80% into the consolidation chart pattern - triangle chart pattern. An early or late break out is more prone to failure, and therefore less reliable.
After a gold price breakout the apex forms support and resistance levels for the gold price. XAUUSD Price that has broken out of the apex should not retrace past the apex. The apex of the consolidation pattern is used as a stop loss setting area for open XAUUSD trades.
When these consolidation patterns form we say that the XAUUSD market is taking a pause before deciding next direction to take.
These consolidation patterns form when there is a tug of war between the buyers and the sellers and the gold market can't decide which way to proceed.
XAUUSD Trade a Consolidation Pattern? - Technical Analysis Consolidation Chart Pattern in XAUUSD?
However, this consolidation pattern cannot go on forever and just like in a tug of war one side eventually wins, looking at the gold chart example displayed below see how the xauusd consolidation chart pattern eventually had a gold price break out and moved in one direction.
XAUUSD Consolidation Chart Pattern XAUUSD Price Breakout Downwards - Sell XAUUSD Signal
XAUUSD Consolidation Chart Pattern XAUUSD Price Breakout Upwards
