A head and shoulders pattern is also a trend reversal formation.
It is formed by a Valley (left shoulder), followed by a Lower Valley (head), and then another Higher Valley (right shoulder).
A “Neckline” is drawn by connecting the highest points of the two Peaks. Neckline resistance does not need to be strictly horizontal.
This illustrates that the downward trend is coming to an end. When a Head and Shoulders formation is seen in a downtrend, it signifies a major reversal. The pattern is confirmed once the price breaches the neckline resistance. In this example, we can easily see the head and shoulders pattern.
How to Trade the Head and Shoulders Pattern:
ENTRY: we put an entry order above the neckline.
TARGET: We can also calculate a target by measuring the lowest point of the head to the neckline. This distance is approximately how far the price will move after it breaks the neckline.
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Transaction en cours
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2316 pips profit... Total Profit: 2316 Closed trade(s): 987 Profit Open trade(s): 1329 Profit
Update Details:
Closed Profit: TP1 @ 1.33934 touched at 09.29.2022 with 414 Profit. TP2 @ 1.35521 touched at 09.30.2022 with 573 Profit.
414+ 573= 987
Open Profit: Profit for one trade is 1.34206(current price) - 1.29790(open price) = 443 3 trade(s) still open, therefore total profit for open trade(s) is 443x 3 = 1329 All SLs moved to Break-even point.
825 pips profit... Total Profit: 825 Closed trade(s): 390 Profit Open trade(s): 435 Profit
Update Details:
Closed Profit: TP1 @ 1.33934 touched at 09.29.2022 with 115 Profit. TP2 @ 1.35521 touched at 09.30.2022 with 275 Profit. 115+ 275= 390
Open Profit: Profit for one trade is 1.34206(current price) - 1.32776(open price) = 145 3 trade(s) still open, therefore total profit for open trade(s) is 145x3 = 435 All SLs moved to Break-even point.