Shoulder Inverted Shoulder Head

Shoulder Inverted Shoulder Head

The name of this graphic pattern speaks for itself. It's basically a shoulder-head, but inverted shoulder formation. A valley is formed (shoulder) followed by another Lower valley (head) and then another valley higher than the latter (shoulder). These formations occur after a long bearish trend.

[caption id="attachment_750" align="aligncenter" width="450"] Shoulder Inverted Shoulder Head[/caption]

Here you can see that this pattern is equal to a shoulder-head-shoulder pattern, but backwards. When this pattern is produced, we will be able to place a purchase order above the resistance level. It is estimated that the initial upward motion can be the same as the amplitude of the head and shoulders pattern, measuring the distance between the head and the resistance, which is roughly what will move price after breaking the same.

[caption id="attachment_751" align="aligncenter" width="499"] Shoulder Inverted Shoulder Head[/caption]

You can see in the previous graph as the price went up after breaking the resistance. We know that you are thinking "the price will continue to go up even after reaching the distance objective that we have commented."

The answer is: Don't be greedy!

If you reached the target you were looking for, feel happy with your winnings. However, there are trading strategies where you can save some of the profits and keep your operations open in case the price continued moving in the desired direction. In our free forex course, you will soon learn about them.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.