Welcome! Dear Traders,you are reading my forex trading experiences. Forex trading is a very profitable and very risky business opportunity. If you are a beginner, calm down,have a cup of coffee, and convince yourself that you need to study hard to win in forex trading. Obviously, the task is not easy as the statistics claim that only 5% traders win in forex trading. If you are determined, serious,and hard working, you can surely be included in the group of winners.

TRADING FOREX WITH BEARISH HEAD AND SHOULDER CHART PATTERN

Dear traders, head and shoulder chart pattern formation is very common on candlesticks chart. This post is aimed to explain the ways to trade forex with bearish head and shoulder pattern formation. Bearish head and shoulder pattern is also called top head and shoulder, but it can be found anywhere on the forex chart.In a bearish head and shoulder formation there is a left shoulder, a right shoulder, a head and a neckline.
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The shoulders and head carry resistance levels on the top. Neckline is drawn adding the support levels by a straight line.The order is generally placed after the right should formation. Breakout of the neckline ensures the downtrend. So logically a sell order with bearish head and shoulder should be placed just below the breakout point.

Some smart traders will look for another pattern formation and breakout at the right shoulder such as symmetrical triangle or descending triangle.If the right shoulder has any of these patterns' break out, an order can be safely placed with a profit target till the neckline. Again if the neckline is broken out the order can be remained open to maximize profit.

If an order is placed just at the right shoulder (after any other pattern break out), the stop loss should be placed at the resistance level on the top of the head, but if the order is placed after the break out, the stop loss should be placed at the resistance level on the top of the right shoulder.

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