Trade Gold Trading

How Do I Trade Trend Line Break Reversals?

When the price moves within a channel for an extended period and eventually halts within this range, it signifies a trend line break, marking a shift in market conditions.

Since this line is point of support/resistance then we expect the market to move and head towards the in the opposite trend price trend direction. When this happens traders will close the orders that they had bought or sold. This is referred to as taking and booking profit.

XAUUSD Upward Trend Reversal

When the price breaches the upward trendline or support zone, a subsequent downward price movement is projected.

XAUUSD Gold Trendline Break Reversal Signals - How to Trade the Trend Line Break Reversals in Gold trading

Trade Trend Line Break Reversals in Gold Trading?

Confirmation of a trend-line breach is generally accepted when the price chart subsequently forms either a lower peak or a lower trough. This specific setup for a gold trend-line reversal concurrently signals an opportunity to initiate a short position once the trend line has been successfully broken.

XAUUSD Downward Trend Reversal

When price breaks downwards trendline - resistance zone - the price then will move upward

XAUUSD Gold Trendline Break Reversal Signals - How Do I Trade Trend Line Break Reversals in Gold?

Trade Trend Line Break Reversal Gold Setups

A downward trendline reversal gets confirmed by a higher low or high on the price chart. Breaking the trendline then signals a chance to go long.

After breaking a trend, prices may consolidate at that level before reversing direction. Regardless of the situation, it's wise to secure profits when trends shift.

To trade this gold tend line reversal setup as a trader once you open a new trade in the direction of the trend reversal price should immediately head in that market direction - in a price break out manner. This means the price should immediately start to head in that direction without any much resistance.

If on the other hand the price does not immediately head in direction of price break out then it is better to close out the open positions because it means that the ruling trend is still holding.

Gold traders should wait for the trend line break. Price must close above or below it. That confirms the reversal.

When gold trading this trading setup it is better to wait until the price break out has been confirmed by price closing above/below the trend line, based on the direction of price.

  • Upwards Trend Market Direction Reversal - this reversal signal is confirmed once the price closes below this upwards trend line, this time should be the right time to open a sell trade, so that you avoid fakeouts.

  • Downwards Trend Market Direction Reversal - this reversal signal is confirmed once the price closes above the downward trendline, this time should be the right time to open a buy trade, so that you avoid fakeouts.

How Do I Trade Trend Line Break Reversal Trading Signals

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