Escape top pattern-head and shoulders top
Let me popularize a head and shoulders top pattern in the currency circle
Head and shoulders top: refers to the trend of the currency price falling after a sharp rise, with three obvious peaks in the middle slightly higher than the two sides. The three peaks are called left shoulder, head and right shoulder from left to right.
The characteristics of head and shoulders top are as follows:
1. It appears in the rising trend, with 3 peaks, the left and right peaks are basically at the same horizontal position, and the middle peak is obviously higher than the peaks on both sides.
2. The low points of the first two highs and falls back to stop the decline are basically the same. The last high and fall fell below the line connecting the first two low points of the fall and closed below it.
3. In the process of forming the head and shoulders top, the trading volume decreases successively.
4. After breaking the neckline, there is often a pullback action, which is blocked and falls back near the neckline to confirm that the downward breakthrough is effective.
5. In the actual trend, there may be 2 left shoulders or 2 right shoulders, which are variant forms of head and shoulders top.
[So when investors encounter the head and shoulders top pattern, how to find the best selling point? 】
1. The first selling point is when the price of the currency falls from the third peak and breaks the neckline, which means that the head and shoulders top pattern has been formed. You should stop profit and stop loss in time to protect your profits.
2. If you miss the first selling point, the price of the currency may fall sharply in the short term. In this case, don't rush to sell. Generally, the head and shoulders top pattern will show a trend of pulling back to the neckline. When the price of the currency pulls back to the neckline, seize the last opportunity. Don't be lucky and think that the price of the currency will continue to rise, otherwise it is easy to suffer greater losses.
