How to Read XAUUSD Chart Patterns for Beginner Traders
The common xauusd chart patterns used to trade xauusd that beginner xauusd trades should know are explained below. These xauusd chart pattern are grouped into reversal chart patterns and continuation trading patterns.
Reversal Chart Patterns
The commonly used xauusd reversal chart patterns are:
Double Tops
Double tops xauusd chart pattern is an M shaped 2 tops or 2 peaks pattern that forms on the xauusd price chart during a xauusd upwards trend.
Double tops xauusd pattern is a bearish xauusd pattern that forms when price reaches a resistance level.
The xauusd price will move upward & then dip slightly then turn up & move up to the top level where it had reached or slightly below this level then move downward again forming what is known as a double top chart pattern.
Double Bottom
Double bottoms xauusd chart pattern is a W shaped two bottoms or two lows xauusd pattern that forms on the xauusd price chart during a xauusd trading downwards trading trend.
Double bottoms xauusd chart pattern is a bullish xauusd pattern that forms when price reaches a support level.
The xauusd price will move downward in then move upwards slightly then turn downward and move downward to the bottom level where it had reached or slightly above this level then move upwards again forming what is known as a double bottoms chart pattern.
Head & Shoulders Chart Pattern
Head & Shoulders pattern is a bearish reversal chart pattern that forms after a xauusd upwards trend.
There is an initial peak which is the first shoulder then a slight dip in the xauusd price, then a second higher peak which is the head then another xauusd price dip followed by the last peak in xauusd price which is the second shoulder.
The lowest points between the two xauusd price lows forms the neckline & the reversal xauusd signal from this head and shoulders pattern is confirmed once xauusd price moves below this neckline.
Reverse Head and Shoulders Chart Pattern
Reverse Head & Shoulders chart pattern is a bullish reversal chart pattern that forms after a xauusd trading downwards trading trend.
There's an initial dip which is the first inverse shoulder then a slight peak in xauusd price, then a second lower dip which is the reverse head then another xauusd price peak followed by the last xauusd price dip in xauusd price which is the second inverse shoulder.
The highest points between the two xauusd price peaks forms the neck-line & the reversal xauusd signal from this reverse head and shoulders pattern is confirmed once xauusd price moves above this neckline.
Continuation Trading Patterns
Continuation xauusd trading chart patterns are:
Rising Wedge or Ascending Wedge
Rising wedge is a continuation chart pattern that forms during an upwards xauusd trend & this xauusd patterns looks like a triangle xauusd consolidation pattern that has a rising slope that is heading upward.
Rising wedge chart pattern has rising sloping support and resistance levels and this xauusd pattern shows that xauusd prices keep moving higher & once xauusd prices move out of this rising wedge xauusd pattern the upward trend is likely to continue.
Falling Wedge or Descending Wedge
Falling wedge is a continuation chart pattern that forms during a downwards xauusd trend & this xauusd patterns looks like a triangle xauusd consolidation pattern that has a descending slope that is heading downward.
Falling wedge pattern has descending sloping support & resistance levels & this xauusd pattern shows that xauusd prices keep moving lower & once xauusd prices move out of this descending wedge xauusd pattern the downwards xauusd trend is likely to continue.
Bullish Pennant or Bearish Flag
Bullish Flag is a xauusd chart pattern with parallel support & resistance levels that forms during a xauusd upward trend and a xauusd continuation signal is generated when price moves above the bullish flag chart pattern & the upward trend continuation signal is generated by this continuation xauusd bullish flag pattern.
Bearish Pennant or Bearish Flag
Bearish Flag is a xauusd chart pattern with parallel support & resistance levels that forms during a xauusd downward trend and a xauusd continuation signal is generated when price moves below the bearish flag chart pattern & the downward xauusd trend continuation signal is generated by this continuation xauusd bearish flag pattern.
How to Read XAUUSD Chart Patterns for Beginner Traders
