What's a Trend?
A trend is the tendency of prices to move in one specific direction for certain period of time.
Trading prices generally move in trends, the market trend direction can either be upward or downward.
Traders use xauusd tools such as trend lines to identify trends.
Trend lines help to define entry and exit points for trades that are open by traders.
The trend line define the market trend & as long as trading prices continue to move within the trend line the traders will keep their trade open. Traders only will close their open trade once the trading prices stop moving within the trendlines.
The 2 types of trends are:
Upward Trend - Drawn using an upward trend line
Downward Trend - Drawn using a downward trend line
Up-ward Trend
Guide: How to Draw and Trade Upward Trend
Upwards Trend - Drawn using an upward trend line
Downwards Trend
Guide: How to Draw and Trade Downward Trend
Down-wards Trend - Drawn using a downward trend line
The MT4 software provides charting tools for drawing trends on charts. To draw gold trend on charts traders can use trend line drawing tool provided in MT4 software that is shown below.
Definition and Meaning of a Trend & How to Trade a Trend
To draw a trend line on MetaTrader 4 platform and choose point A where you want to start drawing and then point B where you want the it to touch. You also can right click in trend line and on the properties option select option to extend ray by checking the 'ray check box', if you don't want to extend it, then untick this option in your xauusd software.
The trend is your best friend. Is a popular saying among traders because you never should trade against it. This is the most reliable xauusd method to trade XAUUSD because once gold trading prices begin to move in one direction they can move in that direction for quite some time in what is known as a trend.
Principles of How to Draw and Define Trend
Use gold trading candle charts
- The areas used to draw the market trend are along the lows of price bars in a upward market. An upwards bullish trend move is defined by higher highs & higher lows.
- The points used to draw are along the highs of the price bars in a falling downwards market. A downward bearish trend move is defined by lower highs and lower lows.
- The points used to draw the trend lines are extremes points - the high or the low gold trading price. These price extremes are critical because a close beyond the extremes tells traders that the market trend of xauusd may be changing. This is an entry or an exit trade signal.
- The more often a trend is touched by gold price but it isn't broken, then the more powerful the market trend signal.
