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HOW TO TRADE HEAD AND SHOULDER CHART PATTERN

HOW TO TRADE HEAD AND SHOULDER CHART PATTERN

Submitted by • July 18, 2020 indieseducation.com

Head and shoulder chart pattern is a reversal chart pattern. They are easy to identify. They can be formed either in a bullish or bearish trend.
The head and shoulder chart pattern is a bearish reversal pattern that shows a baseline with three peaks and the middle peak is being the highest (same as that the height of the head is greater than the two shoulders).

The formation is rarely perfect and some noise always present between the respective shoulders and head.
Left Shoulder: Price rise due to an ongoing uptrend followed by a peak (short-lived) and after that a minor (10-20%) retracement occurs and price decline to the baseline forming a trough.

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Voted by bablubiki

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