Head and Shoulders Chart Pattern

Head & Shoulders Chart Pattern Reversal Trading Signals

This is an upwards gold trend reversal chart pattern that forms after an extended Gold Trading upwards xauusd trend. It is made up of three consecutive peaks, the left shoulder, the head & the right shoulder with 2 moderate troughs between the shoulders.

This reversal trading strategy pattern is considered complete once xauusd price penetrates below the neckline, which is drawn by joining the two troughs between the shoulders pattern.

This reversal gold signal is confirmed once xauusd prices moves below the neckline

Summary:

• This reversal strategy pattern forms after an extended move upward
• This reversal trading strategy pattern indicates that there will be a reversal in xauusd market
• This reversal trading strategy pattern resembles head with shoulders thus its name.
• To draw the neck-line we use chart point 1 and point 2 as shown below. We also extend this line in both directions.
• We sell when the price breaks below the neckline: as explained below:

Head and shoulders reversal strategy pattern can also form on a slanting neckline, like the xauusd example illustrated & explained below:

Gold Upward Trend Reversal Strategy - Head and shoulders Gold Chart Pattern

Gold Upward Trend Reversal Strategy - Head and shoulders Gold Chart Pattern

This reversal strategy pattern can also be formed on a slanting neckline, like the one above, the neck-line doesn't have to be necessarily horizontal.