How Do You Analyze Head and Shoulders Chart Pattern?

Trading XAUUSD Interpret Head and Shoulders Chart Pattern

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

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

This Head and Shoulders Chart Pattern is considered to be complete once the xauusd price penetrates and moves below the neckline - the neckline is drawn by joining the two xauusd price troughs in between the two shoulders.

To open a sell gold trade after this gold reversal trading signal - gold traders will place their sell stop pending orders just below the neck line region.

Summary: Trading Gold Interpret Head and Shoulders Chart Pattern?

• Head and Shoulders Chart Pattern forms after an extended gold upward trend move
• Head and Shoulders Chart Pattern signals that there will be a reversal in the upward trend
• Head and Shoulders Chart Pattern resembles a head with shoulders thus its name - head and shoulders chart pattern.
• To draw the neckline we use chart point 1 and chart point 2 as shown on the head and shoulders chart pattern example illustrated and explained below. We also extend this neckline in both directions.
• Gold traders will sell when the price breaks below the neckline: as explained on the head and shoulders chart pattern example illustrated and explained below.

How to Interpret Head and Shoulders Chart Pattern? - How Do I Read Head and Shoulders Chart Pattern?

The head and shoulders chart pattern can also form on a slanting neckline - like on the head and shoulders chart pattern example illustrated and explained below:

How to Interpret Head and Shoulders Chart Pattern? - How Do I Read Head and Shoulders Chart Pattern?

Analyze Head and Shoulders Chart Pattern?

Interpret Head and Shoulders Chart Pattern

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

How Do You Read Head and Shoulders Chart Pattern