How Do I Trade Breakouts in Gold Trading

With consolidation patterns the market can move in any direction after a price breakout. Consolidation xauusd setups are used to identify break-out setups in charts. There are 2 types of consolidation patterns that form on charts:

• Symmetric Triangles - Consolidation Chart Patterns
• Rectangles - Range Gold Setup Patterns

Consolidation Setup Patterns

Symmetric triangles are patterns with converging trend lines that form a price consolidation period that signals there going to be a price break-out in one direction after this chart pattern setup breaks out in one direction. The buy signal from a symmetric triangle is the upside price break, while a downside price break is a xauusd sell signal. Ideally, a the price breaksout from a consolidation pattern setup prior to reaching the apex of the triangle.

Trend lines trend lines can be drawn connecting the lows and highs of the consolidation pattern for the price, the trend-lines formed are symmetric & converge to form an apex - symmetric triangle pattern. A price break-out should occur somewhere between 60 % & 80 % into the triangle consolidation pattern setup. An early or late xauusd trading break-out is more prone to xauusd whipsaws, & therefore less reliable. After a price breakout to one side the apex of the symmetric triangle forms the support & resistance levels for the price. Price that has broken out of the consolidation pattern setup should not retrace past the apex. The apex is used as a stoploss setting level for the open trades placed after a price break-out.

When xauusd trading consolidation patterns form we say that the market is taking a pause before deciding the next direction to take - this also signals an impending price breakout - How to Trade Breakouts in XAUUSD Trading - How Do You Identify Breakout Pattern? - Break-out Strategy XAUUSD.

These trading consolidation patterns form when there is a tug of war between buyers and sellers and the market can't decide which way to proceed.

Consolidation Chart Patterns - How Do I Trade Breakouts in Gold Trading? - How to Identify Breakout Pattern

However, this consolidation pattern setup cannot go on forever & just like in a tug of war one side eventually wins, the chart examples below shows how the consolidation pattern eventually had a price break-out & moved in one direction.

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After price consolidating, If price breaks-out the upper line we open xauusd buy trades, if price breaks-out the lower line we sell trades.

How Do I Trade Break outs in XAUUSD Trading

A rectangle consolidation pattern setup is a range with narrow price action which develops into a market consolidation period in market. The range is defined by 2 parallel trendlines which are horizontal & these indicate the presence of support & resistance levels at this particular area. Rectangle consolidation chart pattern is drawn on a chart using a rectangle, hence, the name xauusd trading rectangle chart pattern.

For this consolidation pattern setup, price forms a series of highs & lows that can be connected with horizontal trend-lines that are parallel to each other. Rectangle consolidation setup forms over an extended period of time giving this pattern setup its rectangle shape.

A xauusd break-out of price action from the rectangle consolidation setup forms when either of the horizontal line is penetrated and the range of the rectangle pattern setup is broken. An upside price break-out is a buy signal. A downside price break-out is a sell trade signal.

Rectangle Chart Pattern - How Do I Trade Breakouts in Gold Trading? - How to Identify Break Out Pattern - Break-out Strategy XAUUSD

Price Breaks Out of the rectangle consolidation range after a period of time and price continues to move upwards after an upwards price break-out.

How Do I Trade Breakouts in XAUUSD Trading - How Do You Identify Breakout Pattern? - Break-out Strategy XAUUSD Trading - Breakout Strategy Guide