What is forex Figure head-shoulder ?
What is forex Figure head-shoulder ?
What is forex Figure head-shoulder ?
Continue our discovery of technical analysis tools with the figure-head shoulder-shoulder (ETA), is to reverse the trend to make a prediction as to fluctuations in market prices, and figure-head inverted shoulder.
Welcome to this article on the analysis of Figure shoulder-head-shoulder (ETA), or simply called head-shoulder.
There are several types of figure reversal of the trend that are used in technical analysis. Figure shoulder-head-shoulder is one of the most reliable. It can be observed on the Forex charts and can afford to make predictions about the fluctuations in market prices.Figure BEEN clearly identifies the signal and the starting point of price fluctuations.
This training consists of three peaks, tracing the outline of a head and shoulders. These peaks are characterized by the following steps:
1. The price of a currency increases until the first peak and then decline, thus forming the first shoulder.
2. The value of the currency will rise again to a level higher than the previous peak, then falls again, forming the head.
3. The price increases for the third time, without exceeding the peak formed by the head, then down, forming the second shoulder of the figure.
The shoulders of this formation are formed by the first and third summit. They are more or less an equivalent level but never beyond the second peak representing the head. The neckline is the line on which rests the figure, which is said to be complete when the online courses falls below the neck after the second shoulder. This will happen when the market volume is important. If this happens when the market volume is limited to cross the line of neck down is ignored.
How to use the information provided by this figure of reversal?Thanks to the decrypted information on the chart, traders enter the market under the neck line and feel the speed of price fluctuation by calculating the distance between the neck and head.
The figure-head inverted shoulder
This is the inverted version of the formation studied above. The three peaks formed by the online courses are characterized by the following steps:
1. The price of a currency falls to a low point, then increases, forming the left shoulder (reversed).
2. The courses in the same currency falling again to a level lower than the first shoulder, then back again, thus forming the head (upside down).
3. The price decline for the third time, then increases again, forming the second shoulder (reversed).
4. The neckline is represented by the base line connecting the highest points of the graph.
To ensure the success of your future operations on the foreign exchange market, it is important to master the concepts explained above regarding Figure shoulder-head-shoulder (ETA).
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