What Does Head and Shoulders Metals Chart Pattern Mean?

Head & Shoulders Metals Chart Pattern is a reversal metal chart pattern which forms after an extended Metals Trading upwards trend.

Head & Shoulders Metals Pattern is made up of three consecutive peaks, the left shoulder, the head & the right shoulder with 2 moderate troughs between the 2 shoulders.

To open a sell metals trade after this head and shoulders reversal metals trading signal, Metals traders place their sell stop metals trade orders just below the neckline.

Summary:

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

What Does Head and Shoulders Metals Chart Pattern Mean?

Or the head and shoulders metal pattern can also form on a slanting neck line, like the metal examples illustrated & described below:

What Does Head and Shoulders Metals Chart Pattern Mean?

Example of Head and Shoulders Metals Trading Pattern on a Metals Chart

How to Analyze the Head and Shoulders Metals Chart Pattern

This Head & Shoulders Metals Chart Pattern can also be formed on a slanting neck line, like the head and shoulders metal chart pattern examples above, the neck-line does not have to be necessarily horizontal.