How Do I Trade a XAUUSD Up trend Reversal

How Do I Trade Upwards Trend Reversal: How Do I Identify a Upward Trend Reversal XAUUSD Signal

Up trend Reversal

When trading price breaks out below the upwards trend line (support) market will then move down-wards

How Do You Trade an Up trend Reversal? - Strategy for Trading a Upwards Trend Reversal

Upward Trend Reversal Strategy

After trading price has moved in an upwards direction for an extended period of time within a up trend it reaches a point where it stops moving within the up-ward trend. When this occurs we say the up-wards trend line has been broken and this is interpreted as a upward trend reversal signal.

Since the upward trend line is the point of support and this point of support has been broken after a up trend line break - we then expect the price to move down-wards towards the opposite direction and this is interpreted as a up trend reversal signal.

When this happens traders will close the open buy orders that they had bought. This is known as taking profit.

This trend reversal signal is considered to be complete with formation of a lower high of price. This also provides a trading opportunity to open sell trades once the up trend line is broken - gold reversal signal.

NB: Sometimes when price breaks its xauusd upwards trend it may first of all consolidate before moving in the opposite direction. Either way it's always good to take profit when market up trend reverses.

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

If on the other hand the prices don't immediately move in the down-ward direction of the price breakout then it is best to close out the sell xauusd trade because it means the up trend is still holding.

Another tip is to wait for the up trend line to be broken & for the market to close below it so as to confirm this upward trend reversal signal.

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

Hence, when trading this xauusd up trend reversal setup it's best to wait til the price break out has been confirmed by price closing below the trend line.

• Upward Market Trend Direction Reversal - this trend reversal signal is confirmed once the price closes below this upward trend-line, this should be the correct time to open a sell gold trade, so as to avoid a whipsaw.