uptrend, or a reversal to the downtrend. In most cases, AB and CD are equal in time and price. There will be times when price will consolidate within the area of points 2 3, without giving any indications of the direction. The first is perhaps the most obvious never cut off the highs or lows in order to make the channel fit. This tells us that price does not have the momentum to break the previous high, thus indicating a change of trend. It was developed.
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Last but not least, the head and shoulders is best traded on the 4-hour chart or higher. As we can see from the above, the abcd pattern is a simple harmonic pattern that appears on the price charts frequently. Aggressive traders may even place the stops below the point 3, but it is always better to forex liquidity gap give price enough room to move without hitting the stops. Fortrader, suite 11, Second Floor, Sound Vision House, Francis Rachel Str. If it does, perfect, however a more common scenario is one where the market will come in contact with a key level prior to reaching the objective. If we look at the fundamental reason for the forming of this pattern, we can see why it works so well.