The 4 Reversal Chart Patterns in CFD Explained with Examples

Reversal Patterns confirm the reversal of the cfd market cfd trend once this reversal chart pattern setup is confirmed.

These reversal patterns are formed after extended cfd market cfd trend either upwards or downwards & these reversal chart patterns signal that the cfd market cfd trend is ready to reverse.

1. Reversal Chart Patterns

• Double Tops Reversal Patterns

• Double Bottom Reversal Patterns

• Head and Shoulders Reversal Patterns

• Reverse Head and Shoulders Reversal Patterns

Double Tops

Double tops cfd pattern is a reversal pattern that is formed after an extended upward cfds trend. As its name implies, this formation is made up of two consecutive peaks which are roughly equal, with a moderate trough between.

Summary:

• Double tops cfd trading pattern forms after an extended move upward
• Double tops cfd pattern formation indicates that there will be a reversal in cfd market
• We sell when price breaks-out below neckline: see below for explanation.

Example of Double Tops Reversal Chart Pattern on a CFDs Chart

Double Bottom

Double bottom cfd pattern is a reversal pattern that is formed after an extended downward cfds trend. It is made up of 2 consecutive troughs which are roughly equal, with a moderate peak between.

Summary:

• Double bottoms cfd pattern forms after an extended move downwards
• Double bottoms cfd pattern formation indicates that there will be a reversal in cfd market
• We buy when price breaks-out above neck-line: see below for the explanation.

Example of Double Bottoms Reversal Chart Pattern on a CFDs Chart

Head & Shoulders Trading Pattern

Head and Shoulders chart pattern is a reversal pattern which forms after an extended CFD upward cfds trend. It is made up of three consecutive peaks, the left shoulder, the head & the right shoulder with two moderate troughs between the shoulders.

Summary:

• Head & Shoulders chart pattern forms after an extended move upwards
• Head & Shoulders pattern formation indicates that there will be a reversal in cfd market
• Head & Shoulders pattern formation resembles head with shoulders thus its name.
• To draw the neckline we use chart point 1 & point 2 as displayed below. We also extend this line in both directions.
• We sell when price breaks-out below neckline: see the trading chart below for explanation.

Examples of Head & Shoulders Reversal Chart Pattern on a CFDs Chart

Reverse Head & Shoulders Trading Pattern

Reverse Head and Shoulders chart pattern is a reversal head & shoulders pattern which forms after an extended CFD downward cfds trend. It resembles an upside down head shoulders.

Summary:

• Reverse Head & Shoulders cfd pattern forms after an extended move downwards
• Reverse Head & Shoulders pattern formation indicates that there will be a reversal in cfd market
• Reverse Head & Shoulders chart pattern formation resembles upside-down, thus the name Reverse.
• We buy when price breaks-out above neck-line: see the trading chart below for explanation.

Example of Reverse Head and Shoulders Reversal Chart Pattern on a CFDs Chart

Reversal Chart Patterns Tutorials

Double Tops Patterns and Double Bottoms Chart Patterns

Head and shoulders CFDs Chart Patterns & Reverse Head & Shoulders Chart Patterns