Reversal Chart Setups Head and Shoulders & Reverse/Inverse Head and Shoulders

Head and Shoulders Reversal Chart Setup

This is a reversal chart pattern setup that forms after an extended Gold price upwards trend. It's made up of 3 consecutive peaks, the left shoulder, the head and the right shoulder with 2 moderate troughs in between the shoulders pattern.

This Head and Shoulders Reversal Pattern is considered complete once price penetrates below the neckline, which is drawn by joining and connecting the 2 troughs in between the shoulders pattern.

To go short, Gold traders place their sell stop orders just below the neckline.

Summary:This reversal chart setup forms after an extended move upward

This formation indicates that there will be a reversal in the market

This formation resembles head with shoulders thus its name.

To plot the neck-line we use point 1 and point 2 like is illustrated below. We also extend the line in both directions.

We sell when price breaks below the neckline: see the chart below for explanation.

Reversal Gold Setups

Or the head & shoulders also can form on a sloping neck-line, like the exemplification put on display below:

Head & Shoulders Gold Trading Setup Technical analysis Explained

Example of Head Shoulders Setup on a Gold Price Chart

Head & Shoulders Gold Pattern Setup - Reversal Gold Trading Pattern Setups Explained

Head & Shoulders Chart Pattern

This reversal pattern can also be formed on a sloping neckline, like the one above, the neckline does not have to be necessarily horizontal.

Reverse Head & Shoulders Reversal Chart Setup

This is a reversal head & shoulders chart pattern setup that forms after an extended Gold downwards trend. It resembles an upside-down head and shoulders pattern.

This Head and Shoulders Reversal Pattern is considered complete once price penetrates above the neckline, which is drawn by joining the two peaks between the reverse head and shoulders pattern.

To go long buyers place their buy stop orders just above the neckline.

Summary:This reversal pattern forms after an extended move downwards

This formation indicates that there will be a reversal in the market

This formation resembles an upside-down head and shoulders pattern, thus its name Reverse.

We buy when price breaks above the neckline: see the chart below for explanation.

Reverse Head & Shoulders Gold Pattern Setup