How to Commodities Trade Head and Shoulders Commodity Trading Chart Pattern in Commodities

How to Trade the Head and Shoulders Commodity Trading Chart Pattern

Head and Shoulders Commodities Trading Chart Pattern

Head and Shoulders Commodities Trading Chart Pattern is a reversal commodity chart pattern that forms after an extended Commodities upward trend.

Head and Shoulders Commodity Trading Chart Pattern is made up of three consecutive peaks, the left shoulder, the head and the right shoulder with two moderate troughs between the two shoulders.

This Head and Shoulders Commodity Trading Chart Pattern is considered complete once commodities price penetrates below the neckline, which is drawn by joining the two troughs between the shoulders.

To open a sell commodity trade after this reversal commodity signal, Commodities traders place their sell stop commodity orders just below the neckline.

Summary:

• This Head and Shoulders Commodities Trading Chart Pattern forms after an extended move upwards - commodity upward trend
• This Head and Shoulders Commodities Trading Chart Pattern formation indicates that there will be a reversal in the commodity market
• This Head and Shoulders Commodity Trading Chart Pattern formation resembles a head with shoulders thus its name.
• To draw the neckline we use chart point 1 and point 2 as shown on the commodity example illustrated and explained below. We also extend this line in both directions.
• We sell when commodities price breaks below the neckline; as explained on the commodity example illustrated and explained below.

Commodities Trade Head and Shoulders Commodities Trading Chart Pattern in Commodities?

Or the head and shoulders commodity chart pattern can also form on a slanting neckline, like the commodity example illustrated and explained below:

Commodities Trade Head and Shoulders Commodities Trading Chart Pattern in Commodities?

Example of Head and Shoulders Commodity Trading Pattern on a Commodity Trading Chart

How to Trade the Head and Shoulders Commodity Trading Chart Pattern - How Do I Analyze Head and Shoulders Commodity Trading Chart Patterns?

This Head and Shoulders Commodities Trading Chart Pattern can also be formed on a slanting neckline, like the head and shoulders commodity chart pattern example above, the neckline does not have to be necessarily horizontal.