A trend line or neckline is drawn connecting the "Head and Shoulders" pattern to determine the potential trade opportunities and targets. The neckline can be also formed in an angle (slanted). Trade: Connect "Head and Shoulders" bottoms in a trend line or neckline. When the price closes below the neckline, a potential short trade is signaled. Short one tick below...
Trading "Cup and Handle" pattern is a two fold process. First a "Handle" can be traded as a corrective pattern and secondly as a continuation pattern (of the prior trend) after a breakout from the top of the "Cup." The handle part (right side) usually corrects about 25% to 38% (of depth of the Cup) from the high pivot point to the bottom of the Cup. After the...