Trade Gold Trading

Different Type of Market Analysis

What is a Momentum Trend?

A momentum gold trend holds more power than the last one. You can show it with a steeper gold trend line than the old one. When a new line slopes more than before, the gold trend builds added force. It turns much stronger overall. Patterns like these call for a special kind of review.

In the example illustrated and explained: Also when the price is moving up within a channel, if it breaks the upward channel a stronger gold trend is shaped such as illustrated in the illustration revealed below. If as a trader your chart breaks an upward gold trendline to the upward side in an upward moving market such as the one below, Do-not Try to Sell, Buy More Contracts, Remember this gold tip it can make you a lot of money like the way it did in analysis below.

XAUUSD Trend Analysis of Momentum Trends and Parabolic Trends in Chart

Channel Break Up - More Strength on the Upward Movement

Using the trading analysis examples from before, we can also see how steeper new trendlines formed, showing the gold trend was gaining speed.

Steeper trend lines show as price keeps moving.

The newly initiated gold trend has more strength than the previous one like displayed by the forming & shaping of the steeper trend line.

This creates gold trend B and C, like you see in the chart below using MT4. The new, steeper line on the chart shows the added force.

This trading example shows how trend lines A, B, and C illustrate stronger price movements as the market progressively builds momentum.

Momentum Trends in XAUUSD - Momentum Trends and Parabolic Trends

Price Gaining Increased Velocity

But, if the sharpest gold trendline breaks, then it's likely other trendlines will also break. It is best to secure profits as soon as the steepest trendline is broken.

Short-term gold traders like scalpers or intraday folks can use this strategy too. You'll spot this setup a lot on the 5 and 15-minute charts. Parabolic trendlines help you decide where to set your take profit. As soon as the steepest trendline breaks, it's usually a good time to grab your profit.

How Do I Trade These in Gold Trading

The momentum gold trend lines are good technical analysis tools for figuring out where to take profit early before the other traders. This momentum trading pattern formation occurs frequently on 1 min, 5 minute & 15 mins charts & therefore suitable for scalpers & day traders. For intraday trading which is most common? - the best chart to use is 15 Minute sometimes 5 Minute, for example after opening a short-term trade either buy/sell and the market moves some pips in your favor & you identify this pattern then it's best to exit once the steepest trendline is broken and take profit at that point.

Technical Analysis Examples

For this case we will use the short-term chart of minutes for marking, when the pattern appeared as below, it was a great time to take the profit.

Momentum Trends and Parabolic Trends - How to Analyze/Interpret Momentum Trends in Charts

The Momentum in Market Movements.

In the above example illustration a trader trading long would have waited until the steep most trend-line was broken then closed the trade and taking profit at this place thus making profit of 42 pips on this buy gold trade. A trader would have exited the position at the best time & thus avoiding the choppy gold market that followed.

What's Gold Parabolic Trend?

Sometimes a market moves & heads in a parabolic manner, and this is seen when panic buying sets in and trading prices is pushed vertically. During a parabolic up move, there's almost complete absence of sellers, which forms a vacuum of buying. When this occurs, traders dash to just get into the market regardless of price, in fear of being left backwards. This move can make the largest trading price movements in the shortest amount of time, traders will put buy trade orders in this gold trade setup.

For this kind of movement, it is advisable to continue opening buy positions: no analysis is required, just keep buying.

This pronounced gold trend might persist for extended durations, potentially spanning months or even up to two years. Throughout this period, continue entering long positions: as long as the established weekly and monthly gold trend lines remain intact, maintain buying activity.

When gold climbs like this, the top point often signals the end of the run. Prices rarely hit that high again soon. Once you reach that level and the sharpest gold trend line breaks, see it as a full turn in the market. Step back from trading. Take your wins and relax before planning the next step.

A sharp drop in gold can occur with panic sales. Prices fall straight down, often in tough economic times like recessions.

If a trend line is at a very sharp angle, it is less reliable. When most steep lines break, it's best to stop the trade. The example shown and explained below is for crude oil, which has made a parabolic shape. Another example is gold, which happened on the weekly/monthly chart soon after the steepest line in the oil trade chart broke.

Parabolic Trend - Momentum Trends and Parabolic Trends

As a trader if you happen-to come across a parabolic gold trend in an upward trend just keep opening buy and buying some more & you'll more likely to make profits trading this direction, there will be no added technical analysis requirement just the trend lines. The one thing to remember is to exit once the steepest trend line is over because the reversal on this pattern formation is very quick you need to also be very fast. Just make sure that you exit at the correct spot just like in the above illustrations.

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