Sunday, September 6, 2009

Head & Shoulders (Important Chart Patterns)

A trend reversal pattern formed by a peak (shoulder), a higher peak (head) & then another lower peak (shoulder).

  • Happens after an extended uptrend.
  • Place your short entry below the neckline.
  • Calculate our target by measuring the distance between the high point of the head & the neckline.
  • This is approximately distance that the price will move after it breaks the neckline.

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