stephenleachman

HEAD & sHOULDERS (TREND REVERSAL)

FX:EURNZD   Euro Fx/New Zealand Dollar
85 0 15
The head and shoulders are trend reversal patterns. They form at the
end of a trend and makes a kind of triple top or bottme but only with the
middle pick reaching into a higher high or a lower low and the lift and
right picks being equal thus making a sort of head with 2 shoulders. After
this pattern is clear you would wait until price breaks the neckline for
confirmation of the reversal. Once confirmed Target Is the Distance Between
The Top Of Head To Neckline Added To The Breakout. Note: I personally
always trade pullbacks with this pattern never breakouts although I do
have a favorite way of trading this pattern from the right shoulder witch I
will attach here at a latter date.

Conventional Way To Trade The Head & Shoulders Bearish Reversal:

snapshot

-----Head & Shoulders Bearish Reversal-----
(1) Wait for a clear Head & Shoulders to form.
(2) Wait for price to break and close below neck .
(3) Sell pullback at neckline.
(4) Stop Above Right Shoulder
(5) Target Is the Distance Between The Top Of Head To Neckline Added To The Breakout.

Conventional Way To Trade The Reversed Head & Shoulders Bullish Reversal:

snapshot

-----Reversed Head & Shoulders Bullish Reversal-----
(1) Wait for a clear Reversed Head & Shoulders to form.
(2) Wait for price to break and close Above neck.
(3) Buy pullback at neckline.
(4) Stop Below Right Shoulder
(5) Target Is the Distance Between The Top Of Head To Neckline Added To The Breakout.
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