Forex Trading Trend Patterns - The Head and Shoulders Top/Bottom
Head and shoulders tops and bottoms are relatively easy to recognize Forex trading trend patterns, because they have a distinctive shape that identifies them. Nevertheless, it is still a vital part of learning forex trading, and you should still make an effort to understand it.
One way to view head and shoulders top patterns is to view them the same as double top trend patterns, with an added top between the two tops, that is higher than the other two tops.
In a similar way, the head and shoulders bottom trend pattern resembles the double bottom trend pattern, with an added low bottom in the middle.
Same as for the double top and bottom trend patterns, the head and shoulders patterns should be used for the last rise/drop, when investors should enter and place the Forex trading order.
The reason it's called head and shoulders trend patterns, if you haven't figured it out for yourself, is because the pattern resembles a human like figure, with the top tops on both sides as the shoulders, and the high top in the middle as the head.
Paul Gatton, Technical Writer