Stocks & Commodities V. 22:12 (14-18): The End Of The Trend by Cornelius Luca
Youíre riding along with the trend, watching your returns consistently increase. You know itís not going to go
on foreverÖ but how do you know when itíll end?
As much as we like trends and their inherent profitability, all good things must eventually come to an end. Dealing with their demise is easier said than done; itís not only that traders loathe parting
with a good thing, but ending trends is often a messy affair that can take its toll on your budget. However, there are several reversal formations you can watch for that may give you a warning that the trend is almost over.
The most significant trend reversal patterns are the
1. Head & shoulders and inverse head & shoulders
2. Double top and double bottom
3. Triple top and triple bottom
Arguably, the second tier of reversal formations are:
1. Rounded top and rounded bottom
2. Rectangle reversal
4. Upthrust and spring
This article will analyze the head & shoulders formation, using currency pairs as examples.