What's Consolidation Chart Pattern?

Trading XAUUSD Identify a Consolidation Trading Pattern in XAUUSD Trading

The Best Trading Patterns Tutorial for Beginners - How to Identify and Trade Consolidation Chart Pattern

Gold Patterns for Day Trading - Gold Patterns Guide

This Consolidation trading patterns charts guide explains how to identify xauusd patterns - identifying xauusd chart patterns is the first step when it comes to learning how to trade with Consolidation xauusd chart patterns in Gold.

Consolidation xauusd trading price patterns commonly form on Gold Trading charts & this chart pattern analysis tutorial explains how to trade & analyze gold charts using Consolidation xauusd trading chart patterns.

Consolidation Chart Patterns

Consolidation xauusd trading patterns are xauusd chart patterns with converging gold trend lines that form a xauusd trading price consolidation period. The technical buy point from a consolidation chart pattern is the upside break, while a downside break is a technical sell signal. Ideally, a market breaks-out from a symmetrical triangle prior to reaching the apex of the triangle.

Gold Trendlines can be drawn connecting the lows & highs of the consolidation phase, the trend lines formed are symmetric and converge to form an apex. A breakout should occur somewhere between 60-80% into the consolidation chart pattern - triangle pattern. An early or late break out is more prone to failure, and therefore less reliable. After a xauusd trading price breakout the apex forms support and resistance levels for the xauusd trading price. Gold Price that has broken out of the apex should not retrace past the apex. The apex of the consolidation chart pattern is used as a stop loss setting level for the open Gold trades.

When these consolidation patterns form we say that the Gold Trading market is taking a break before deciding which is the next direction to take.

These consolidation patterns form when there is a tug of war between the buyers & the sellers & the xauusd market can't decide which way to move.

Consolidation Chart Pattern - What is Consolidation Chart Pattern?

However, this consolidation pattern can't go on forever & just like in a tug of war one side eventually wins, looking at the gold chart below see how the consolidation eventually had a breakout and moved in one direction. Now how do we as xauusd traders make sure that we are on the side that is winning?

Breakout Downwards Sell Gold Trading Signal after a Consolidation Pattern in Gold

Break-Out Upward Buy Gold Trading Signal after a Consolidation Pattern in Gold

Now back to our question, how do we make sure we are on the side that is winning?

Well we wait until xauusd trading price moves past one of the lines of the consolidation chart pattern formation and put buy or sell orders in that direction. After consolidating, If xauusd price breaks out the upper line we buy, if it breaks out the lower line we sell.

Alternatively if you do not want to wait out the consolidation chart pattern, you can use pending gold orders. If you would like to know more about setting pending gold orders go to the topic: Stop Entry Gold Order Types

The two types of Gold Trading stop order types used to trade consolidation patterns are:

• Buy Entry Stop Gold OrderAn order to buy at a level above the xauusd trading price - above consolidation chart pattern.

• Sell Entry Stop Gold OrderAn order to sell at a level below the xauusd trading price - below consolidation chart pattern.

These are gold orders to buy above the xauusd market or to sell below the xauusd market.