The video discusses XAUUSD or the gold chart, its support and resistance levels, and how to use technical analysis and failed chart patterns for trade entry points.

Understanding XAUUSD: A Technical Analysis of Gold Trading

Gold has always been a hot commodity for traders, but how to analyze and trade it? This article will explore the technical analysis of XAUUSD, or the gold chart, and delve into insights from Johan Nordstrom from Trading Walk.

Strong Uptrend and Support/Resistance Levels

As we can see from the chart, XAUUSD has had a very strong uptrend from a top to bottom support level. Additionally, Nordstrom suggests that a tight constellation pattern can signal a breakout, and the last resistance level will often act as a support level in the future. This pattern is illuminating for traders to note, as it allows them to predict support and resistance levels and capitalize on sudden changes in the trajectory of the trend.

Short-term Trading Opportunities

While trading during an upward trend can be tempting, as Nordstrom points out, entering a long position at the current resistance level may be too late. Instead, traders should wait for the next support level in order to minimize risk. Additionally, a small pullback can be expected before a potential move upward.

Cup and Handle Patterns for Confirmation

Part of Nordstrom’s suggested methodology is to look for cup and handle patterns on the 1-hour chart as a continuation pattern. This is because if a pattern fails, it often provides excellent trading opportunities in the opposite direction. In the case of the cup and handle pattern, the reward can be high with a minimal amount of risk. The breakout point serves as the entry point, the bottom of the pattern is the take-profit point, and the pattern’s top serves as the stop-loss point.

Conclusion

XAUUSD is an exciting and profitable asset for traders. By combining technical analysis with Nordstrom’s suggested methodology of waiting for support levels and cup and handle patterns, traders can reduce their risk while maximizing their profits. Whether you are a seasoned pro or are just starting out in the world of trading, understanding the technical analysis of gold trading can lead to profitable, long-lasting trades.