What Does a Head and Shoulders Chart Pattern Look Like?

Example of Head and Shoulders Chart Pattern

Head and Shoulders Chart Pattern is a Bearish Commodities Trading Pattern - Head and Shoulders Pattern is a Bearish Commodity Trading Signal Pattern

Summary:

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

What Happens To Commodity Trading Price Action After a Head and Shoulders Chart Pattern?

Or the head and shoulders chart pattern can also form on a slanting neck line, like the commodities trading example shown below:

What Happens To Commodity Trading Price Action After a Head and Shoulders Chart Pattern?

Example of Head & Shoulders Trading Pattern on a Commodity Trading Chart

Analysis of Head and Shoulders Pattern - Example of Head and Shoulders Chart Pattern

This Head & Shoulders Pattern can also be formed on a slanting neck line, like the head & shoulders chart pattern example above, neckline does not have to be necessarily horizontal.