How to Read Gold Chart Patterns for Beginner Traders

The common gold chart patterns used to trade gold that beginner gold trades should know are explained below. These gold chart pattern are grouped into reversal chart patterns & continuation trading patterns.

Reversal Trading Patterns

The commonly used gold reversal chart patterns are:

Double Tops

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

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

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

Double Bottoms

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 gold downwards trend.

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

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

Head and Shoulders Chart Pattern

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 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.

Continuation Chart Patterns

Continuation gold trading chart patterns are:

Rising Wedge or Ascending Wedge

Rising wedge is a continuation pattern that forms during an upwards gold trend & this gold patterns looks like a triangle gold consolidation pattern that has a rising slope that is moving upward.

Rising wedge chart pattern has rising sloping support and resistance levels and this gold pattern shows that gold prices keep moving higher & once gold prices move out of this rising wedge gold pattern the upward trend is likely to continue.

Falling Wedge or Descending Wedge

Falling wedge is a continuation pattern that forms during a downwards gold trend & this gold patterns looks like a triangle gold consolidation pattern that has a descending slope that's heading downward.

Falling wedge chart pattern has descending sloping support & resistance levels and this gold pattern shows that gold prices keep moving lower & once gold prices move out of this descending wedge gold pattern the downward gold trend is likely to continue.

Bullish Pennant or Bearish Flag

Bullish Flag is a gold chart pattern with parallel support & resistance levels that forms during a gold upward trend and a gold continuation signal is generated when the price moves above the bullish flag pattern and the upward trend continuation signal is generated by this continuation gold bullish flag pattern.

Bearish Pennant or Bearish Flag

Bearish Flag is a gold chart pattern with parallel support & resistance levels that forms during a gold downward trend and a gold continuation signal is generated when the price moves below the bearish flag pattern and the downward gold trend continuation signal is generated by this continuation gold bearish flag pattern.

How to Read Gold Chart Patterns for Beginner Traders