Learn these patterns and you will never lose again

Patterns

Chart – Head and Shoulders (Classic and Inverted)

Are you looking for a strong chart pattern that helps you predict trend reversals? Let’s review the Head and Shoulders pattern in both its classic and inverted forms, and how to use it effectively in trading.

1. Classic Pattern (Descending Head and Shoulders)

Basic Conditions:

- The head is the highest peak among two other peaks (called the shoulders).

- The right shoulder is usually higher than or equal to the left shoulder.

- The bottoms of the shoulders should be close together, with the possibility that the bottom of the right shoulder is slightly higher.

How to trade it?

- After the pattern is completed, a neckline is drawn by connecting the bottoms of the shoulders.

- When the price breaks the neckline, the downward target is calculated by measuring the distance between the top of the head and the neckline, then subtracting it from the breakout point.

- The success rate of this pattern reaches 96%, making it one of the most reliable patterns.

2. Inverted Pattern (Ascending Head and Shoulders)

Basic Conditions:

- The head is the lowest bottom among two other bottoms (the shoulders).

- The left shoulder is usually lower than or equal to the right shoulder.

$FUN $SEI #USNationalDebt #MarketPullback #PowellVsTrump #SwingTradingStrategy