What Does Inverse Head and Shoulders Chart Pattern Mean?

Inverse Head & shoulders Chart Setup

Inverse Head & Shoulders Pattern is a reversal head and shoulders chart pattern that's formed after an extended downwards trend. It resembles an upside down head shoulders.

Inverse Head and Shoulders Pattern is considered complete once price penetrates above the neck-line, which is drawn by joining these 2 peaks between the reverse shoulders pattern setup.

Traders open buy gold trades using this reversal signal once the price closes above neckline.

Summary:

• Inverse Head & Shoulders Pattern forms after an extended move downward
• Inverse Head & Shoulders Pattern indicates that there'll be a reversal in the market
• Inverse Head & Shoulders Pattern formation resembles up-side down, thus its name Inverse Head and Shoulders Pattern.
• We buy when price breaks-out above neck-line: as described on the example displayed and shown below.

What Does Inverse Head and Shoulders Pattern Mean? - What Happens to Price Action After a Reverse Head and Shoulders Pattern in XAUUSD?

Example of Inverse Head & Shoulders Setup on a Chart

How to Analyze the Inverse Head and Shoulders Setup