What is a Gold Trend Reversal Signal?
Trend Reversal Explanation & Definition of Trend Reversal
A trend reversal in gold trading is when the direction of prices change and start heading in opposite market direction.
To identify this gold reversal setup traders use the trend reversal strategy of gold trend line break.
A trend reversal means that a up trend reverses and starts heading in a downward direction and for a down-trend reversal the down-trend reverses & starts moving in an upwards direction.
Because a trend reversal is a change in the overall movement of price & not based on the movement of one candlesticks, traders use the market trend reversal setup to determine when the trend has been reversed.
Up trend Reversal
When price breaks-out below the upwards trend-line (support) market will then move down-wards
Upward Trendline Break - Trend Reversal Explanation & Definition of Gold Trend Reversal
This trend reversal signal is considered to be confirmed with formation of a lower high of the price. This also provides a trading opportunity to sell once the trendline is broken - gold reversal.
Down trend Reversal
When price breaks above downward line (resistance) the price then will move up
Downward Trendline Break - Trend Reversal Explanation & Definition of Gold Trend Reversal
This trend reversal signal is considered to be confirmed with the creation of higher low. This reversal setup also provides a trading opportunity to open a buy trade once the trendline is broken - trendline reversal trading signal.
Trend Reversal Strategy
After price has moved in a particular direction for an extended period of time within a trend it reaches a point where it stops moving within the market trend. When this occurs we say that the trend-line has been broken & this is interpreted as a trend reversal.
Since the trend line is the point of support or resistance & this point of support or resistance has been broken after a trend line break - we then expect the price to move towards the opposite market direction & this is interpreted as a trend reversal.
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