What does an inverse head and shoulders pattern indicate?
Inverse head and shoulders pattern indicates the end of bearish phase and onset of an uptrend.
Traders enter a long position when the up breaks through the resistance line.
They would look for a rise in volume to confirm the trend change.
When the inverse head and shoulders pattern forms, traders enter a long position
What is Inverse Head And Shoulders?
An inverse head and shoulders, also called a "head and shoulders bottom", is similar to the standard head and shoulders pattern, but inverted: with the head and shoulders top used to predict reversals in downtrends. This pattern is identified when the price action of a security meets the following characteristics: the price falls to a trough and then rises; the price falls below the former trough and then rises again; finally, the price falls again but not as far as the second trough. Once the final trough is made, the price heads upward, toward the resistance found near the top of the previous troughs.
Inverse head and shoulders pattern indicates the end of bearish phase and onset of an uptrend.
Traders enter a long position when the up breaks through the resistance line.
They would look for a rise in volume to confirm the trend change.
When the inverse head and shoulders pattern forms, traders enter a long position
What is Inverse Head And Shoulders?
An inverse head and shoulders, also called a "head and shoulders bottom", is similar to the standard head and shoulders pattern, but inverted: with the head and shoulders top used to predict reversals in downtrends. This pattern is identified when the price action of a security meets the following characteristics: the price falls to a trough and then rises; the price falls below the former trough and then rises again; finally, the price falls again but not as far as the second trough. Once the final trough is made, the price heads upward, toward the resistance found near the top of the previous troughs.