Principles of Technical Analysis
To come up with a gold strategy a trader will need to learn about the following analysis concepts
What's a Technical Chart?
Gold analysis includes the use of gold charts to analyze gold price movements using price patterns in an attempt to predict the future gold price movement depending on the price patterns.
What are Support and Resistance Levels in Gold Trading?
Support and resistance levels are used to analyze gold chart areas that act as barriers for gold price movements. Support levels is like the floor of the price while resistance levels is like the ceiling of the price.
Traders use support and resistance levels that form on the charts to set their gold stop loss orders or gold take profit orders. Traders also use support and resistance zones on gold trading to open new gold trades & to close open trades.
Price will normally bounce of these gold support and resistance levels and this is why these gold support and resistance levels are used by traders to generate signals.
What are Trend Lines?
Trend lines are used in gold trading so as to determine the direction of the trend.
An upwards gold trend will be plotted on a gold chart when prices are moving upwards. Therefore, this upward trend line will be used to show an upward movement of gold prices - upward gold trend.
A downward gold trend will be plotted on a gold chart when prices are moving downwards. Therefore, this downward trend line will be used to show downward movement of gold prices - downward gold trend.
Once a gold trend line forms on the charts then prices are likely to keep moving in the direction of the trend line for some time until when there is gold trendline break gold trend reversal signal.
What are Indicators?
Technical indicators are gold tools used by traders to generate signals.
The different gold indicators used in analysis & these indicators will be used to analyze the trend price movement as well as the momentum of the trend.
Some of the most commonly used gold technical indicators include:
MAs Indicator MACD RSI ADX Stochastic Oscillator
What are Candles Setups?
Candlesticks patterns are gold candlestick formations that are used to interpret the price movement depending on the pattern of a gold candlestick or a pattern of a series of gold candles.
The various gold candlesticks patterns used in gold trading are:
Continuation Candlestick Patterns Reversal Candle Patterns
What are Chart Patterns?
Chart patterns are commonly repeating price patterns that form on the charts.
These gold chart patterns are commonly used by traders to analyze the future gold price movement depending on the type of gold chart pattern has formed on the charts.
The various gold patterns used in gold trading are:
Continuation Trading Patterns Reversal Trading Patterns
About Technical Analysis
Traders wanting to study more about each of the above gold analysis tools can get more information from the learn trading section - analysis concepts that explains the above gold analysis concepts.
This gold analysis concepts guide can be found on the main side navigation menu of this learn trading website under the learn lessons section.
