Commodities Upward Commodities Trend Reversal Trading Strategy

Head and Shoulders Commodity Trading Chart Pattern Reversal Commodity Trading Signals

This is an upward commodity trend reversal commodity chart pattern that forms after an extended Commodities upward commodities trend. It is made up of three consecutive peaks, the left shoulder, the head and the right shoulder with two moderate troughs between the shoulders.

This reversal trading strategy pattern is considered complete once commodities price penetrates below the neckline, which is drawn by joining the two troughs between the shoulders.

This reversal commodity signal is confirmed once commodity prices move below the neckline

Summary:

• This reversal trading strategy pattern forms after an extended move upwards
• This reversal trading strategy pattern indicates that there will be a reversal in the commodity market
• This reversal trading strategy pattern resembles head with shoulders thus its name.
• To draw the neckline we use chart point 1 and point 2 as shown below. We also extend this line in both directions.
• We sell when commodities price breaks below the neckline; as explained below:

Head and shoulders reversal trading strategy pattern can also form on a slanting neckline, like the commodity example illustrated and explained below:

Commodities Upward Commodities Trend Reversal Trading Strategy - Head and shoulders Commodities Trading Chart Pattern

Commodities Upward Commodities Trend Reversal Trading Strategy - Head and shoulders Commodities Trading Chart Pattern

This reversal trading strategy pattern can also be formed on a slanting neckline, like the one above, the neckline does not have to be necessarily horizontal.