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Best Price Action Pattern For GOLD XAUUSD Trend Following Trading


best price action pattern for trend following trading gold

This bullish pattern is very powerful.

Being spotted on a daily/4h/1h, any time frame, it will help you to accurately predict a strong bullish movement on Gold.


In this article, I will teach you to identify the best buying volumes accumulation pattern on Gold chart that you can apply for trend following trading XAUUSD.



Pattern Elements


The initial point of this pattern will be a completion point of a strong bullish impulse.


At some moment, the price finds a strong horizontal resistance, stops growing and retraces.


bullish impulse on gold

The second point of the pattern will be a completion of a retracement.

It should strictly be a higher low - it should be higher than the low of an initial bullish impulse.


correctional movement on gold from resistance

After a retracement, the price should return to a horizontal resistance and set an equal high, that will be the third point of the pattern.


equal high on gold a key resistance

Then, the price should retrace AT LEAST one more time from a horizontal resistance and set a new higher low.


bullish accumulation pattern for gold trading

After that, the price should set one more equal high.


bullish price action pattern for gold trading

Pattern Structure


3 equal highs and 2 higher lows will compose a bullish accumulation pattern.


Please, note, that the price may easily set more equal highs and more consequent new higher lows and keep the pattern valid.


bullish price action pattern gold for day trading

Above is the example of a bullish accumulation pattern on Gold on an hourly time frame. The price set 3 equal highs and 3 consequent higher lows.


Pattern Psychology


This pattern will signify the weakness of sellers and the accumulation of buying volumes.


price action analysis on gold

The point is that each consequent bearish price movement from a resistance is weaker than a previous one. It means that fewer sellers are selling from the resistance and more buyers start buying, not letting sellers go lower.


price action trading gold

In our example, we can clearly see the consequent weakening, bearish price movements.


Pattern Meaning


This pattern indicates a highly probable breakout attempt of the resistance.

A candle close above that provides a strong bullish signal.


best price action entry for gold trading

The broken resistance will turn into support and will provide a safe point to buy the market from.


price action trading example gold xauusd

In our example, the market broke the underlined horizontal resistance and closed above that. It indicates the completion of a bullish accumulation and a highly probable bullish trend continuation.


price action pattern for bullish trend continuation trading

You can see that Gold retested a broken structure and then a strong bullish wave initiated.


In a strong bullish market that we currently contemplation on Gold, this bullish pattern will provide a lot of profitable trading opportunities.


No matter whether you are scalping, day trading or swing trading Gold, this bullish accumulation pattern will help you to predict long-term, mid-term and short-term bullish movements.

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