Learn Forex Chart Patterns
On this site we show you some basic chart patterns which you can use in your day-to-day forex trading. If correctly identified, chart patterns might lead to huge breakouts and loads of pips for you
HEAD AND SHOULDERS
The Head and Shoulders chart pattern is a trend reversal formation. It is most prevalent (and reliable) in uptrends. As the market starts to slow down, and bulls and bears a fighting for dominance, the price forms a peak (shoulder), followed by a higher peak (head), and then another lower peak (shoulder). If you connect the lowest two troughs, a so-called neckline will be formed. It doesn’t have to be horizontal to be called a neckline. Unlike the best forex broker amateur forex brokers and traders frequently have a problem with identifying this chart pattern because of inclined necklines, so it's imperative to learn forex before you start trading. The pattern is complete when the forex market breaks the neckline, therefore we deem it appropriate to place pending orders to enter the market just below the neckline. When a forex currency pair goes through the neckline on negligible volume, you could witness a wave up. Of course, don't take this for an absolute truth; it might not happen sometimes. After the wave up, you could observe the increasing force of mounting selling pressure when the forex rate plummets with greater volume.
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