How to Read Reversal Chart Patterns for Beginner Traders

The common reversal chart patterns used to trade xauusd that beginner xauusd trades should know are described below.

Reversal Trading Patterns

The commonly used xauusd reversal chart patterns are:

Double Tops Reversal Chart Pattern

Double tops xauusd pattern is an M shaped two tops or 2 peaks pattern that forms on the xauusd price chart during a upward xauusd trend.

Double tops xauusd pattern is a bearish xauusd pattern that forms when price reaches a resistance zone.

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 Bottoms Reversal Chart Pattern

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 downward xauusd trend.

Double bottoms xauusd chart pattern is a bullish xauusd pattern that forms when price reaches a support zone.

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 Reversal Chart Pattern

Head and Shoulders pattern is a bearish reversal chart pattern that forms after a upward xauusd 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 and the reversal xauusd trading signal from this head and shoulders reversal chart pattern is confirmed once xauusd price moves below this neckline.

Reverse Head and Shoulders Reversal Chart Pattern

Reverse Head & Shoulders chart pattern is a bullish reversal pattern that forms after a downward xauusd trend.

There is 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 trading signal from this reverse head & shoulders pattern is confirmed once xauusd price moves above this neckline.

How to Read Reversal Chart Patterns for Beginner Traders