Best Trend-Following Price Model For Gold XAUUSD Trading

6 days ago

In this article, I will show you a powerful chart setup for profitable trend following trading Gold. I will break down how it works with examples.

Here is how this price model looks:

It is based on 5 important conditions that should be strictly met.

1 - Gold should trade in a global bullish trend.

The price should consistently update Higher Highs HH and Higher Lows HL.

2 - Higher Lows should respect a rising trend line, acting as a support.

It should be respected by at least 3 consequent bullish movements from that.

3 - After a formation of a high above a trend line, the price should start a correctional movement in a minor trend in a bullish flag pattern.

It can be a horizontal, parallel or expanding channel.

4 - Correcting, Gold should test a major rising trend line, being within a flag.

5 - A bullish movement should initiate after a trend line test and the price should break and close above a resistance line of a flag.

When all these 5 conditions are met, we can expect a bullish movement on Gold at least to a level of a current high from where a correction started.

A broken resistance line of a flag and a major rising trend line will compose a safe zone to buy Gold from.

The best time frame for this model will be a daily.

Let's study a real example of such a price model on Gold chart on a daily.

Examine a price chart of Gold on a daily time frame above.
All 5 conditions are met, and we can anticipate a rise to the underlined red resistance.
Our buy zone will be based on a broken resistance of the flag and a major rising trend line.

You can see that our goal was successfully reached.

Here is the proof -

This price model will help you to predict strong bullish waves, trading Gold. A simple combination of a trend analysis and a price action are the 2 basic components that you need to study to identify that properly.

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3 days ago

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VasilyTrader

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