XAGUSD Trend Line Break

After xagusd price has moved in a certain direction for an extended period of time within a channel it reaches a point where it stops moving within the channel. When this happens we say that the trend line has been broken.

Since the line is point of support or resistance then we expect the market to move toward the opposite market direction. When this happens traders will close the orders that they had bought or sold. This is referred to as taking profit.

Up xagusd trading trend Reversal

When xagusd price breaks-out upward line (support) the market will then move down

This signal is considered to be complete with the creation of lower high or a lower low. This also provides a trading opportunity to go short once it's broken.

Down xagusd trading trend Reversal

When xagusd price breaks-out downward line (resistance) the market will then move up

Downwards Channel break

This signal is considered to be complete with creation of a higher low or higher high. This also provides a trading opportunity to go long once it's broken.

NB: Sometimes when xagusd price breaks its trend it might first of all consolidate before heading in the opposite market direction. Either way it is always good to take profit when xagusd market direction reverses.

To trade this xagusd setup as a trader once you open a new trade in the direction of the trend reversal the price should immediately move in that specific direction, in a xagusd price break-out manner. This means that the market should immediately move in that direction without much of a resistance.

If on the other hand the market does not immediately move in the direction of the price breakout then it is best to close out the trade because it means that the trend is still holding.

Another tip is to wait for the trend line to be broken and for the market to close above or below it so as to confirm this xagusd trade signal.

What happens is that most traders open trades waiting for a reversal even before the trend is broken, only for the price to touch this line and for the current market direction to hold and silver to continue with the current market direction.

Therefore, when trading this xagusd set up it is better to wait until breakout has been confirmed by xagusd price closing above or below the trendline, depending on the direction of the market.

• Up-ward Market Direction Reversal - this signal is confirmed once the market closes below this upward line, this should be the correct time to open a sell short trade, so as to avoid a whipsaw.

• Downwards Market Direction Reversal - this signal is confirmed once the market closes above the downward line, this should be the correct time to open a buy long trade, so as to avoid a whipsaw.

Combining With Double Tops or Double Bottoms Setups

A good trade setup to combine this xagusd setup with is the double tops and double bottoms xagusd chart patterns. Read Double Top and Double Bottom Chart patterns Tutorial.

This setup should already have formed before the trend break signal. Because these double tops and double bottoms are also reversal xagusd signals, then combining these 2 setups will give the trader a good probability of avoiding a whipsaw.

In the above chart screenshots these setups can be confirmed to have formed even before the reversal xagusd trade signal popped up.

First Example of Upwards Direction Reversal - the Double tops pattern had already formed before the trend break signal appeared on the chart.

Second Examples of Downwards Direction Reversal - the Double bottoms xagusd pattern had already formed before the trend break signal appeared on the chart.

Double Top or Double Bottoms Combined With other Reversal Signals