Head and Shoulders pattern

Candlestick or Bar pattern with three consecutive picks. Highest middle pick is called head, followed by low turning point at the same level or below previous low. The next lower pick signifies bull weakness, it completes the pattern if the neckline is broken down. Textbooks usually suggest, that following trend down will run at least for the same distance down as the height of the head. But in more liquid, “ideal” FX market it usually first retests the neckline from below before heading much lower to previous resistance levels.

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