Oil Upward Oil Trading Trend Reversal Trading Strategy
Head and Shoulders Crude Oil Trading Chart Pattern Reversal Trading Signals
This is an upward oil trend reversal crude oil chart pattern which forms after an extended Oil Trading upward oil trend. It is made up of three consecutive peaks, the left shoulder, the head & right shoulder with 2 moderate troughs between the shoulders.
This reversal strategy pattern is considered complete once oil price penetrates and moves below the neck line, which is plotted by connecting these 2 troughs in between the shoulders.
This reversal oil signal is confirmed once oil prices move below the neck line
Summary:
- This reversal trading strategy pattern forms after an extended move upward
- This reversal strategy pattern indicates that there will be a reversal in crude oil market
- This reversal strategy pattern resembles head with shoulders thus its name.
- To draw the neck-line we use chart point 1 & point 2 as displayed below. We also extend this line in both directions.
- We sell when oil price breaks below the neck line: as is explained below:
Head & shoulders reversal trading strategy pattern can also form on a slanting neck line, like the crude oil trading example explained below:
Oil Upward Oil Trading Trend Reversal Strategy - Head and shoulders Oil Trading Chart Pattern
Oil Upward Oil Trading Trend Reversal Strategy - Head and shoulders Oil Trading Chart Pattern
This reversal trading strategy pattern can also be formed on a slanting neck-line, like the one above, the neck-line does not have to be necessarily horizontal.
