How to Read Different Types of Gold Chart Patterns for Beginner Traders
Continuation Chart Patterns
Continuation Chart Patterns
Pennant gold chart pattern is a continuation pattern that looks like a symmetrical triangle in shape & is drawn using support & resistance lines.
Pennant chart pattern occur during a gold trend - either upwards trend or downwards trend. These pennant chart patterns signal consolidation periods of the gold price.
Bullish pennant chart pattern - occurs during an upward gold trend direction and this bullish pennant chart pattern shows that gold price has the potential to move upwards and continue in the overall upward gold trend direction.
Bearish pennant trading pattern - occurs during a downward gold trend direction and this bearish pennant chart pattern shows that gold price has the potential to move downwards and continue in the overall downward gold trend direction.
Continuation Chart Patterns
Gold wedge chart patterns are continuation chart patterns.
Bullish wedge gold chart pattern - Rising Wedge, Ascending Wedge, Ascending Triangle is a bullish continuation chart pattern that signals gold prices are likely to continue moving upwards once gold prices move above this rising wedge chart pattern - ascending wedge gold chart pattern.
Bearish wedge gold chart pattern - Falling Wedge, Descending Wedge, Descending Triangle is a bearish continuation chart pattern that signals gold prices are likely to continue moving downwards once gold prices move below this falling wedge chart pattern - descending wedge gold chart pattern.
Continuation Chart Patterns
Rectangle gold chart pattern is a trend continuation pattern and this pattern has horizontal support and resistance levels.
Bullish rectangle pattern - When a rectangle pattern forms during a gold upward trend it signals an upward gold trend move is likely to follow next once gold price breakout of this gold triangle chart pattern.
Bearish rectangle pattern - When a rectangle pattern forms during a gold downward trend it signals a downward gold trend move is likely to follow next once gold price breakout of this gold triangle chart pattern.
Reversal Chart Patterns
Double Top Chart Pattern
Double tops gold pattern is a reversal chart pattern that forms after a gold uptrend & this gold pattern forms 2 tops at approximately the same level.
Bearish Reversal Gold Signal - Double tops gold pattern is a bearish reversal gold trading signal.
Double Bottom Chart Pattern
Double bottom gold pattern is a reversal chart pattern that forms after a gold downtrend & this gold chart pattern forms 2 bottoms at approximately the same level.
Bullish Reversal Gold Signal - Double bottoms gold pattern is a bullish reversal gold trading signal.
Head and Shoulders Chart Pattern
Head & Shoulders pattern is a reversal gold pattern that forms at the tops of an upward gold trend. Head & Shoulders pattern is a bearish reversal chart pattern that forms after a gold upwards trend.
There is an initial peak which is the first shoulder then a slight dip in gold price, then a second higher peak which is the head then another gold price dip followed by the last peak in gold price which is the second shoulder.
The lowest points between the two gold price lows forms the neck-line & the reversal gold signal from this head and shoulders chart pattern is confirmed once gold price moves below this neckline.
Reverse Head & Shoulders Chart Pattern
Reverse Head and Shoulders pattern is a reversal gold pattern that forms at the bottom of a downward gold trend. Reverse Head and Shoulders pattern is a bullish reversal chart pattern that forms after a gold downwards trend.
There's an initial dip which is the first inverse shoulder then a slight peak in gold price, then a second lower dip which is the reverse head then another gold price peak followed by the last gold price dip in gold price which is the second inverse shoulder.
The highest points between the two gold price peaks forms the neck-line and the reversal gold signal from this reverse head and shoulders chart pattern is confirmed once gold price moves above this neckline.
Consolidation Trading Patterns
Consolidation gold Chart patterns are also known as symmetric triangles - the consolidation pattern looks like a symmetrical triangle.
Symmetrical triangle chart pattern signal a consolidation in the gold price & a gold price breakout is likely to happen on either side once the gold price breaks out of this consolidation triangle chart pattern.
Gold traders will wait for the gold price to break out in one direction before opening a gold trade in the direction of the gold price breakout.
Summary:
Continuation Chart Patterns: Pennants - bullish pennant and bearish pennant, Wedges - Ascending wedge and descending wedges and Rectangles
Reversal Chart Patterns: Double Tops, Double Bottoms, Head and Shoulders, Reverse Head and Shoulders
Consolidation Trading Patterns: Symmetrical Triangles
How to Read Different Types of Gold Chart Patterns for Beginner Traders
