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Inverted Head and Shoulders PDF Print E-mail
Monday, 22 December 2008 14:01
All the same rules apply to the Inverted Head and Shoulders pattern that apply to the Head and Shoulders pattern, only in reverse.

forex daily chart

     1.    Shoulder 1: First turn back of price on the move down.

    2.    Head: Second turn back from prices lower than the high of Shoulder 1

    3.    Shoulder 2: third failure of price to get lower , higher than the Head

    4.    Neckline; highest price on the three pullbacks form the head and shoulders.

Trading the Inverted H and S pattern requires a little work though.  Once all the parts are identified, you need to look for and chart the following.

    1.    Break of the neck line to initiate a trade.

    2.    Distance form neckline to peak of head, extended upward from neckline an equal distance is the     target.

Once you have established these two things the set up can begin.
forex daily chart
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