FOREX THEORY
How to Trade Fakeouts
Chart Patterns (Part 2)
The head and shoulders pattern is
considered a reversal. If formed at the end of an uptrend, it could signal a
bearish reversal. Conversely, if it is formed the end of a downtrend, it could
signal a bullish reversal. Head and shoulders are known for generating false
breakouts and creating perfect
opportunities for fading breakouts.
False breakouts are common with
this pattern because many traders who have noticed this formation usually put
their stop loss very near the neckline.
 The head and shoulders pattern is considere...){kind=link}
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