Here are some of the most powerful reversal chart patterns in stock trading, futures trading, cryptocurrency trading, gold trading, oil trading and forex trading, which indicate that the market may be about to change direction.
Head and Shoulders Pattern
Chart Pattern - Head and Shoulders Pattern
The head and shoulders pattern is a chart pattern that consists of a large peak and two slightly smaller peaks on either side of the large peak. Traders look to the head and shoulders pattern to predict a reversal from an uptrend to a downtrend.
The first and third peaks are usually lower than the second peak, after this pattern is formed the price returns to the same support level, also known as the "neckline". Once the third peak drops to the support level, the price is likely to break the neckline and the price will trade in a downtrend.
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