Shoulder head shoulder pattern

Shoulder head shoulder pattern

Investigations of different methods of technical analysis used by Forex traders and exploration of shoulder head shoulder pattern.

Welcome to our section of the patterns of shoulder head shoulder Forex, we guide you on your way to understanding how the shoulder head shoulder patterns are analyzed and used as part of technical analysis of Forex.

There are several reversed trend patterns that are used in Forex technical analysis. This article focuses on the pattern of shoulder head shoulder. The shoulder head shoulder pattern serves as one of the patterns of invested more reliable trend used in Forex technical analysis. This pattern can be observed in Forex charts and aids in forecasting price movement. In sales transactions, the formation of reversed shoulder head shoulder pattern allows you to clearly identify the signal and the entry point of the price movement.

The shoulder head shoulder pattern consists of three peaks of price movement, like the contours of the head and shoulders. The three peaks of price movement are characterized by the following movements:

1. The price of the currency rises to a peak and then declines first, forming the first shoulder.
2. The same currency price increases again, this time to a level higher than the previous peak point and then decreases (forming the head).
3. The price of money increases for the third time, but does not move beyond the second peak (the head), then decreases (forming the second shoulder).

The shoulders of the shoulder head shoulder patterns are formed by the first and third peak. Have approximately the same height, but are lower than the peak of the second "head". The head is represented by the second peak and is always the highest of all peaks. The neck is the baseline that supports the three peaks. The shoulder head shoulder pattern is completed and recorded as part of the second shoulder. Prices drop below the neck when a heavy volume market. When the breakpoints occur during a low market volume, the breakpoint is ignored and considered as false.

How operators use the information provided by the pattern reversed shoulder head shoulder? Using the information provided for the formation of the graph, operators make an entry below the neck of the shoulder head shoulder formation. By analyzing the distances between the neck and head, operators can predict how far will the price movements.
Inverted shoulder head shoulder pattern

The shoulder head shoulder pattern is reversed upside down version of the standard pattern.

The three peaks of price movement are characterized by the following movements:
Left Shoulder - a drop in price to a low point, followed by an increase in the price.
Head - the price of the currency falls below the left shoulder and then up again.
Right shoulder - the price of the currency falls the third time and then rises again.
The neckline - the baseline connecting the highest points on the graph.

This article introduced the pattern reversed shoulder head shoulder and explained its importance as a tool of technical analysis for forex traders. It is important to understand this pattern for success in the buying and selling future.