Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Glossary
Inverse Head and Shoulders
Inverse Head and Shoulders in Trading
The model is characterized by three successive minimum values market prices that are located on different lines: Two that are above (shoulders) at one side and the smallest (head) lies therebetween. There is also a level of the neck (resistance) that connects the highs.
When the pattern is formed, and the cost rises above the level of the neck or the resistance level (some deviations are possible), investors will have a buy signal. It is expected that the rally will continue, although the price may move to the level of the neck. It is now considered as the support, but it usually stops around.
Target Price
It is assumed that after the formation of the reverse pattern head and shoulders, the cost usually rises at least until the target level calculated as follows:
T = H + (H - H) Where: T - Target Level N - Cleavage Line (Initial Resistance) H - Head Line Pattern (Lower Down)
Put your knowledge into practice
Choose the financial instrument that suits you
Capital risk warning