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MT4 Tools for Drawing Gold Trend Lines and XAUUSD Channels

How to Draw Downward XAUUSD Trend Lines on XAUUSD Charts

A downward gold trend line is drawn above the gold downward gold trend pattern formed by consecutive lower highs, the downward gold trend line must connect at least two highs, with the most recent high being lower. For our gold downward gold trend examples we shall use the MT4 technical analysis software gold charts to illustrate an example of downward xauusd trend.

Since xauusd price moves down in a zigzag manner gold traders normally draw a downward gold trend line which shows the general downward direction of the gold prices. In gold market technical analysis, this general xauusd price direction is referred to as the TREND by xauusd traders. In xauusd trading analysis definition we can define this down gold trend line is drawn on a XAUUSD chart showing the resistance levels (bearish market direction).

Downward XAUUSD Trendline MetaTrader 4 XAUUSD Trend Line Indicator - How Do I Draw Downward XAUUSD Trendlines on XAUUSD Charts?

A down gold trend occurs when the xauusd price makes a series of lower highs and lower lows. Each high is lower than the previous high - lower high, and each low is lower than the previous low - lower low therefore showing bearish xauusd price movement.

Gold Down trend lines gain more validity each time xauusd price touches the downward gold trend line but does not penetrate the gold trend line. A down gold trend remains the general direction until this series of lower highs and lower lows is broken.

In gold trading analysis, An upside penetration of a down gold trend line is a technical buy gold trading signal, and usually the first indication that the bearish direction of gold prices may soon reverse.

Drawing a Downward XAUUSD Trend Line

When it comes to learning how to draw and learning xauusd trading analysis of gold charts, you need to know that when the xauusd market is bearish it forms lower lows and lower highs forming a downward general market direction. These are the points that are used to draw the downward gold trend line.

To draw this gold downward gold trend setup we use resistances and to do it correctly two resistances are needed. When xauusd price touches this gold trend line, then we sell and place stop loss just a few pips above the sloping resistances;

Downward XAUUSD Trend Line MetaTrader 4 XAUUSD Trendline Technical Indicator - How Do I Draw Downward XAUUSD Trend Lines on XAUUSD Charts?

How to Trade Downward XAUUSD Trend Line

When trading with this gold trend line trading method, this gold trend line setup will show the general direction of the xauusd market as downwards therefore gold traders will only open short sell xauusd trades. These are the levels where if xauusd price retraces then these points will provide strong resistance. This is why many short sellers will wait until xauusd price retraces upwards and hits these retracements levels to open sell xauusd trades. Gold trades opened at these levels have a high Risk to Reward Ratio with minimum draw down.

For Example, in the above gold trading example, a gold trader would have opened short sell gold trading signals at the resistance1, resistance2, resistance3 and these sell xauusd trades would have made a lot of profits with minimum amount of draw-down/retracement.

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Downward XAUUSD Channel MT4 Channel Indicator

A gold downward channel is drawn by drawing a line that is parallel to the downward gold trend line and then adjusting it to touch the bottom boundary of the xauusd price movement. This then forms a downward gold channel and as long as the xauusd price stays between these two channels the general gold market direction is intact the xauusd market direction will continue being bearish.

Downward XAUUSD Channel MetaTrader 4 Channel Indicator - How to Draw Downward Gold Trendlines on Gold Charts - Trading Platform MT4 Tools for Drawing Trend Lines and Channels on Charts

Trading the Downward XAUUSD Channel

The downward gold channel is used by xauusd traders to show levels where it is best to take profits. Traders will take some profit once the xauusd price touches the lower channel and wait for another retracement before opening a short sell gold trade again.

Downward XAUUSD Channels MT4 Channels Indicator

The gold trading tools to draw these gold channels studies on the MT4 xauusd charts are located on the Lines Toolbar within the MT4 platform, to access this MetaTrader 4 tool bar if it is not activated on your MT4 Gold Trading Platform, Click in "View" Next to "File" at the top left corner of the MT4 Gold Trading Platform and click View, Then Click on Tool bars, Then Check the Lines Toolbar by clicking on it.

Below is the screenshot of these MT4 tools: just click on this MetaTrader 4 channels drawing tool and select the point to where you want to place this gold channels tool on the xauusd chart.

MT4 Technical Analysis Charts - Downward XAUUSD Channels

Downward Gold Channel MetaTrader 4 Channel Indicator - How to Draw Downward XAUUSD Trendlines on XAUUSD Charts - Trading Platform MetaTrader 4 Tools for Drawing Trend Lines and Channels on Charts

MT4 Toolbar - MT4 Tools for Drawing Gold Trend Lines and XAUUSD Channels used to obtain these gold trend line drawing tools is shown above, to draw these gold trend line setups or gold channels, just select the above MT4 gold trend line drawing tools shown on the MT4 software and select the two points where you want to draw the gold downward trend line.

This gold trend line gold trading strategy is one of the simplest and popular gold indicators used by xauusd traders to analyze the xauusd market trend direction.

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