Flip the head and shoulders and you get a bullish reversal at the end of a downtrend.
The checklist
- A low (left shoulder), a lower low (head), a higher low (right shoulder).
- Neckline connects the two rally highs between them.
- Entry on a close above the neckline; stop below the right shoulder.
- Target = head-to-neckline distance, projected up.
Pro tip
Volume isn't central in forex (there's no single exchange volume), so focus on a clean close and a successful retest.
Wick says
The market doing a handstand. Bullish handstand.
Key takeaways
- Inverse H&S = bullish bottom pattern.
- Trigger = close above neckline.
- Stop below right shoulder, target = pattern height.