How to Trade Trend Lines on Gold. Profitale Trading Strategy Explained XAUUSD

Trend lines provide very safe points for Gold trading.

Learn how to identify the best trend lines on XAUUSD and how to trade them using a profitable strategy that I have been using for years.

Best Trend Lines for Gold Trading

Let's start by discussing 3 important characteristics of a strong trend line.

1 - The strongest trend lines are on a daily time frame

2 - The trend line is based on at least 3 touches and 3 consecutive bullish or bearish movements

3 - Touches are candle wick-based

I spotted a strong falling trend line on XAUUSD chart that meets all 3 criteria.

We see that the price is currently testing it, and we can expect a bearish movement.

But before we open a trade, we need a strong confirmation.

I suggest using a lower-time-frame price action analysis for entries.

Falling Trend Line Entry Model & Strategy

Use the following model to trade falling trend lines that act as resistance on Gold.

After its test, start analysing a 1H time frame.

• Map a bullish price action to a trend line.

• Identify the highest intraday support from where the last bullish movement started.

Your strong bearish confirmation will be its breakout and an hourly candle close below.

• Set a sell limit order on a retest of the broken area.

• Your entry should be the lowest level of this zone.

• Stop loss should be above the highest high.

• Take profit should be the closest daily support.

That's how this model works in practice.

I've done a simple price action analysis on XAUUSD an hourly time frame and found the last strong intraday support area.

I will be waiting for a breakout and an hourly candle close below it to sell Gold.

Stop loss is above HH, and TP is based on the closest daily support.

Rising Trend Line Entry Model & Strategy

You can use the following model to trade rising trend lines that act as support.

After its test, 

• Map a bearish price action to a trend line,

• Find the lowest intraday resistance from where the last bearish movement started.

• A strong confirmation to buy is a breakout and an hourly candle close above this area.

• Set a buy limit order on a retest of the broken area.

• Your entry should be the highest level of this zone.

• Stop loss should be below the lower low.

• Take profit should be the closest daily resistance.

This strategy helps me effectively trade trend lines on Gold.

Just make sure that a trend line that you identify meets all 3 criteria.

Learn by heart lower time frame entry models that I showed you.