Reversal Chart Patterns: Head and Shoulders & Reverse Head Shoulders
Head and shoulders Chart Pattern
This is a reversal bitcoin trading pattern which forms after an extended Bitcoin upward trend. It's made up of three consecutive peaks, the left shoulder, head & the right shoulder with two moderate troughs between the shoulders.
This pattern is considered complete once price penetrates and moves below the neck line, which is drawn by joining the two troughs in between the shoulders chart pattern.
To go short, Bitcoin traders place their sell stop orders just below the neck line.
Summary:
- This Bitcoin pattern forms after an extended move upwards
- This formation indicates that there will be a reversal in btcusd trading market
- This 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 neck-line: see the chart below for explanation.
Or the head & shoulders can also form on a slanting neck line, like the trading example illustrated below:
Examples of Head & Shoulders Pattern on a Crypto Chart
Head & Shoulders Pattern
This cryptocurrency pattern can also be formed on a slanting neck line, like the one above, the neck line doesn't have to be necessarily horizontal.
Reverse Head & Shoulders BTCUSD Pattern
This is a reversal head and shoulders pattern which forms after an extended Bitcoin downward trend. It resembles an upside-down head shoulders.
This pattern is considered complete once price penetrates above the neck line, which is plotted by connecting these two peaks between the reverse shoulders pattern.
To go long buyers place their buy stop orders just above the neck line.
Summary:
- This Bitcoin pattern forms after an extended move downwards
- This formation indicates that there will be a reversal in btcusd trading market
- This formation resembles upside-down, thus the name Reverse.
- We buy when price breaks-out above the neck-line: see the chart below for explanation.
Examples of Reverse Head & Shoulders Pattern on a Chart
Examples of Reverse Head & Shoulders Pattern
