Trading Head and Shoulders and Other Patterns
In this video, Richard Adcock, a Technical Analyst from the Corellian Academy, delves into traditional reversal patterns, focusing on “Head and Shoulders” and “Double Top” patterns.
Traditional reversal patterns often take longer to form than Candlestick reversals, indicating a more deliberate and substantial change in market sentiment.
In order for a reversal to occur, Adcock emphasizes the need for a clear existing trend, and provides detailed insight into the characteristics and implications of the mentioned patterns.
Using the natural gas CFD and gold CFD as examples illustrates the analysis process, emphasizing the importance of the weak test of the previous high as a strong indicator of changing sentiments and the potential development of a significant trend reversal.
In conclusion, it is imperative to recognize and interpret the "Head and Shoulders" and the "Double Top" patterns in the context of effective market analysis as they offer valuable insights for traders and investors by highlighting crucial shifts in sentiment.
