What Does Head and Shoulders Chart Pattern Mean?
Head & Shoulders Chart Pattern is a reversal pattern which forms after an extended Gold Trading upwards trend.
Head & Shoulders Pattern is made up of three consecutive peaks, the left shoulder, the head & the right shoulder with 2 moderate troughs between the two shoulders.
To open a sell gold trade after this head and shoulders reversal gold trading signal, Gold traders place their sell stop orders just below neck line.
Summary:
- This Head & Shoulders Pattern forms after an extended move upward - gold upward trend
- This Head and Shoulders Chart Pattern formation indicates that there will be a reversal in the xauusd market
- This Head and Shoulders Chart Pattern formation looks like a head with shoulders thus its name.
- To draw the neck-line we use chart point 1 & point 2 as illustrated on the xauusd example illustrated & explained below. We also extend this line in both directions.
- We sell when the price breaks-out below the neck-line: as described on the xauusd example illustrated & explained below.
What Does Head & Shoulders Pattern Mean?
Or the head & shoulders chart pattern can also form on a slanting neck line, like the xauusd example illustrated & explained below:
What Does Head & Shoulders Pattern Mean?
Examples of Head and Shoulders Gold Pattern on a Gold Chart
How to Analyze the Head and Shoulders Chart Pattern
This Head and Shoulders Chart Pattern can also be formed on a slanting neck line, like the head and shoulders trading pattern examples above, the neckline does not have to be necessarily horizontal.
