#HeadandShouldersPattern

[forex268dotcom]

Head and Shoulders Pattern

Head and Shoulders Pattern

[thewallstreetjunior-blog]

Winter is coming! Sorry, had to say it here! While Billy is getting his final touch ups for our upcoming children’s book Chart Patterns, we can still enjoy the little bit of summer we have left! Which technical chart pattern do you think this is? A) Descending Triangle B) Head and Shoulders C) Rising Wedge #behindthescenes #bookdesign #childrensbookillustrator #childrensbooks #illustrator #chartpatternsbook #chartpatternstudy #businessbookclub #millionairementor #risingwedge #descendingtriangle #headandshoulderspattern (at Denver, Colorado) https://www.instagram.com/p/CD359UsH1AW/?igshid=4ni0ovwa6zrb

[rc1989]

I've decided that I want to start looking out a bit more for then well known chart patterns when conducting my stock trades.

One of the most well known patterns, The Head and Shoulders Pattern, is illustrated above.

The head and shoulders pattern usually signals an imminent price decline, so technical analysts usually execute a short sale.

The formation consists of a left shoulder, a head and a right shoulder. A line can also be drawn which represents the neckline. The stock's price rises to a peak and subsequently declines, forming the left shoulder. Then, it rises above the former peak and declines again, forming the head. Finally, it rises again but does not reach the height of the second peak before declining again. This forms the right shoulder. When technical analysts see the price falling towards the neckline, they view this as a buying signal because historical patterns have shown that the stock's price will rise shortly afterwards. However, once the pattern reaches the third peak, it is considered as a sell signal.

However, an Inverse Head and Shoulder Pattern, signals the opposite. Technical analysts see the inverse right shoulder as a buy signal and that prices will increase.