How to Read Reversal Chart Patterns for Beginner Traders

The common reversal chart patterns used to trade gold that beginner gold trades should know are described below.

Reversal Chart Patterns

The commonly used gold reversal chart patterns are:

Double Tops Reversal Chart Pattern

Double tops gold chart pattern is an M shaped 2 tops or two peaks pattern that forms on the gold price chart during a upward gold trend.

Double tops gold chart pattern is a bearish gold pattern that forms when price reaches a resistance zone.

The gold price will move up & then dip slightly then turn up & move upward to the top level where it had reached or slightly below this level then move down again forming what is known as a double top chart pattern.

Double Bottoms Reversal Chart Pattern

Double bottom gold chart pattern is a W shaped two bottoms or two lows gold pattern that forms on the gold price chart during a downward gold trend.

Double bottom gold pattern is a bullish gold pattern that forms when price reaches a support zone.

The gold price will move down in then move upwards slightly then turn downward & move down to the bottom level where it had reached or slightly above this level then move upwards again forming what is known as a double bottom chart pattern.

Head & Shoulders Reversal Chart Pattern

Head & Shoulders chart pattern is a bearish reversal pattern that forms after a upwards gold 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 trading signal from this head and shoulders reversal chart pattern is confirmed once gold price moves below this neckline.

Reverse Head & Shoulders Reversal Chart Pattern

Reverse Head & Shoulders pattern is a bullish reversal chart pattern that forms after a downward gold trend.

There is 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 neckline & the reversal gold signal from this reverse head and shoulders pattern is confirmed once gold price moves above this neckline.

How to Read Reversal Chart Patterns for Beginner Traders