Head and Shoulders top
The pinnacle and Shoulders Top Chart Pattern includes a left shoulder, a head, plus a right shoulder. The Neckline is the line that is connecting the 2 lows of the formation also referred to as valleys. The neckline is generally formed as a double bottom, nevertheless the price-levels of the two lows may also be different. We would refer to this as an up-sloping or down-sloping neckline. Head and Shoulders Top
The left shoulder is formed after an extensive turn to the upside. Bears then push the value down forming the 1st valley. The Bulls take over again, reaching a better high in the market, forming your head. The Bears pun intended, the move and push the cost down to form the second valley. The best shoulder is shaped when price rises again but remains underneath the high of the head. In a last move costs are pushed down with good pressure of the Bears and lastly breaks the neckline towards the downside. Head and Shoulders
We enter a trade, once the Head and Shoulders Top Pattern has completed and value closes below the neckline. The stop-loss rests above the right shoulder. The money target for the pattern equals the move from the head to the neckline.
In your Trading the up-sloping Head and Shoulders Top Chart Pattern outperforms the double bottom or down sloping Head and Shoulders Chart Pattern.
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