Reversal Commodities Trading Chart Patterns: Head and Shoulders & Reverse Head Shoulders

Head and shoulders Commodities Trading Chart Pattern

This is a reversal commodities trading pattern that forms after an extended Commodity Trading upward commodities trend. It's made up of three consecutive peaks, the left shoulder, head and the right shoulder with 2 moderate troughs between the shoulders.

This commodity pattern is considered complete once commodities price penetrates and moves below the neckline, which is drawn by joining the two troughs between the shoulders pattern.

To go short, Commodities traders place their sell stop commodities trade orders just below the neckline.

Summary:

• This Commodity Trading pattern forms after an extended move upwards
• This formation indicates that there will be a reversal in the commodities trading market
• This formation resembles head with shoulders thus its name.
• To draw the neck-line we use chart point 1 & point 2 as displayed below. We also extend this line in both directions.
• We sell when commodities price breaks below the neckline point: see the trading chart below for explanation.

Or the head and shoulders can also form on a slanting neck line, like the commodity example illustrated and explained below:

Examples of Head and Shoulders Pattern on a Commodity Trading Chart

Head & Shoulders Pattern

This commodity chart pattern can also be formed on a slanting neck line, like the one above, the neck line doesn't have to be necessarily horizontal.

Reverse Head & Shoulders Commodities Trading Pattern

This is a reversal head and shoulders pattern that forms after an extended Commodity Trading downward commodity trend. It resembles an upside-down head shoulders.

This commodity pattern is considered complete once commodities price penetrates above the neck-line, which is drawn by joining these two peaks between the reverse shoulders pattern.

To go long buyers place their buy stop commodity orders just above the neckline.

Summary:

• This Commodity Trading pattern forms after an extended move downwards
• This formation indicates that there will be a reversal in the commodities trading market
• This formation resembles upside down, thus the name Reverse.
• We buy when commodities price breaks above the neckline point: see the trading chart below for explanation.

Examples of Reverse Head and Shoulders Pattern on a Commodity Trading Chart

Example of Reverse Head & Shoulders Pattern