Forex market might be the biggest market in the world, still, you should join this profession after having a deep though. Those who have started to trade the market to become rich have lost their savings. In fact, there is no shortcut way to make a profit. To get yourself on the right track, you must educate yourself from scratch. Many people in Australia have changed their life just by developing the skills of trading. In this article, we are going to teach you how to trade the head and shoulder pattern like the pro traders. After reading this article, you will have the confidence to trade any bearish reversal based on the head and shoulder pattern.
Formation of the pattern
The formation of the pattern is fairly easy. First of all the price will start rallying higher and eventually fall to a critical support level. After that, the bulls will again push the price high and break above the last high. But the rally will not last long and this time the fall will be much bigger. Eventually, the bulls will again gain strength and push the price high and fail to break above the last high. The first high is your left shoulder, the second high is the head and the third high is the right shoulder. The critical support which refueled the bulls is known as your neckline. By now it should be pretty clear about the formation of the pattern.
Selection of the time frame
The selection of the time frame is the most important thing when you trade the head and shoulder pattern. In the CFD trading industry, trading the lower time period is considered an aggressive strategy. So, try to look for the head and shoulder pattern in the daily and weekly chart. …