How to Oil Trade Head & Shoulders Crude Oil Trading Chart Pattern in Oil

How to Trade the Head and Shoulders Crude Oil Trading Chart Pattern

Head and Shoulders Crude Oil Trading Chart Pattern

Head and Shoulders Crude Oil Trading Pattern is a reversal crude oil chart pattern that forms after an extended Oil upwards trend.

Head and Shoulders Crude Oil Trading Chart Pattern is made up of 3 consecutive peaks, the left shoulder, the head and the right shoulder with 2 moderate troughs between the 2 shoulders.

This Head & Shoulders Crude Oil Trading Chart Pattern is considered complete once crude crude crude oil price penetrates and moves below the neckline, which is drawn by joining the two troughs in between the shoulders chart pattern.

To open a sell oil trade after this reversal oil signal, Oil traders place their sell stop crude oil trade orders just below neckline.

Summary:

• This Head & Shoulders Crude Oil Trading Pattern forms after an extended move upwards - oil upwards trend
• This Head & Shoulders Crude Oil Pattern formation indicates that there will be a reversal in the crude oil trading market
• This Head & Shoulders Crude Oil Chart Pattern formation resembles a head with shoulders thus its name.
• To draw the neck-line we use chart point 1 and point 2 as shown on the oil example shown below. We also extend this line in both directions.
• We sell when crude crude oil price breaks-out below the neck-line: as explained on the oil example shown below.

Oil Trade Head & Shoulders Crude Oil Trading Chart Pattern in Oil?

Or the head and shoulders oil pattern can also form on a slanting neckline, like the oil example shown below:

Oil Trade Head & Shoulders Crude Oil Trading Chart Pattern in Oil?

Example of Head & Shoulders Oil Trading Pattern on a Oil Trading Chart

How to Trade the Head and Shoulders Crude Oil Trading Chart Pattern

This Head & Shoulders Crude Oil Trading Pattern can also be formed on a slanting neckline, like the head & shoulders crude oil pattern examples above, the neck-line does not have to be necessarily horizontal.