Understanding Market Structure

FOREXCOM:XAUUSD   Gold Spot / U.S. Dollar
1) Consolidation
The market enters this phase after a strong movement. Sellers control buyers, which further leads to a downward trend

2) Down trend
Bearish phase - lower lows and lower highs. This is where traders want to go short on breakouts or from levels

3) Distribution
Occurs after a prolonged fall in prices, when buyers gain control of prices, resulting in higher prices

4) Up trend
The bull phase is where you want to be long. See to buy short breakout moves after long rallies have exhausted themselves. Attempts to rally are considered guilty until proven innocent

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