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Bilateral/Consolidation XAUUSD Chart Patterns Gold Trading

With bilateral/consolidation xauusd chart patterns the xauusd market can move in any direction. There are two different types of consolidation xauusd chart patterns that form on gold charts:

  • Symmetric Triangles - Consolidation xauusd chart patterns
  • Rectangles - Range/ranging market

Consolidation XAUUSD Chart Patterns

Symmetrical triangles are xauusd chart patterns with converging gold trend lines that form a consolidation period. The technical buy point from a symmetrical triangle is the upside break, while a downside break is a technical sell gold signal. Ideally, a market breaks out from a symmetrical triangle prior to reaching the apex of the triangle.

Gold Trend lines can be drawn connecting the lows and highs of the consolidation phase, the gold trend lines formed are symmetric and converge to form an apex. A breakout should occur somewhere between 60-80% into the triangle xauusd chart pattern. An early or late breakout is more prone to failure, and therefore less reliable. After a gold price breakout the apex forms support and resistance levels for the gold price. Gold Price that has broken out of the apex should not retrace past the apex. The apex is used as a stop loss setting area for the open Gold trades.

When these consolidation patterns form we say that the xauusd market is taking a break before deciding the next direction to take.

These consolidation patterns form when there is a tug of war between the buyers and the sellers and the xauusd market cannot decide which way to move.

Triangle Trading Setups XAUUSD Trading - Rectangle Chart Patterns Gold Trading

Consolidation Gold Chart Pattern

However, this pattern cannot go on forever and just like in a tug of war one side eventually wins, looking at the gold chart below see how the consolidation eventually had a breakout and moved in one direction. Now how do we make sure we are on the winning side?

Triangle Patterns XAUUSD Trading - Consolidation Gold Trading Chart Setups and Symmetrical Triangles Gold Chart Pattern - Rectangle Trading Chart Setups Gold Trading

Breakout Downwards Sell Gold Trading Signal after a Consolidation

Consolidation Gold Chart Patterns and Symmetrical Triangles Gold Chart Pattern - Rectangle Chart Setups Gold Trading

Breakout Upwards Buy Gold Trading Signal after a Consolidation

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Now back to our question, how do we make sure we are on the winning side?

Well we wait until xauusd price moves past one of the lines and put buy or sell orders in that direction. After consolidating, If xauusd price breaks the upper line we buy, if it breaks the lower line we sell.

Alternatively if you do not want to wait out the consolidation, you can use pending gold orders. If you would like to know more about pending gold orders go to the topic: Stop Entry Gold Order Types

The two types of stop order types used to trade consolidation xauusd chart patterns are:

  • Buy Entry Stop An order to buy at a level above the xauusd market gold price.

  • Sell Entry Stop An order to sell at a level below the xauusd market gold price.

These are gold orders to buy above the xauusd market or to sell below the xauusd market.

Rectangle XAUUSD Chart Pattern

A rectangle consolidation pattern is a trading range with narrow xauusd price action that forms a consolidation phase in xauusd market. The trading range is defined by two parallel gold trend lines which are horizontal and indicate the presence of support and resistance. This gold pattern is drawn on a gold chart using a rectangle, therefore its name rectangle xauusd chart pattern.

For this consolidation xauusd chart pattern, xauusd price forms multiple highs and lows that can be connected with horizontal gold trend lines that are parallel to each other. This gold pattern forms over an extended period of time giving the pattern its rectangle shape.

A breakout of xauusd price action from this consolidation pattern occurs when either of the horizontal line is penetrated and the trading range of this rectangle is broken. An upside breakout is a buy gold signal. A downside breakout is a sell gold signal.

Rectangle Trading Setups XAUUSD Trading - Consolidation XAU/USD Chart Patterns and Symmetrical Triangles XAU/USD Chart Trading Pattern

Rectangle Pattern XAUUSD - Consolidation Pattern

Gold Price Breaks the consolidation range after sometime and continues to move upwards after an upwards market breakout.

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