The 4 Reversal Stock Indices Setup Patterns in Indices Trading Explained with Examples
Reversal Stock Indices Chart Patterns confirm the reversal of the stock indices trading market indices trend once this reversal Indices Trading stock indices chart pattern setup is confirmed.
These reversal Indices Trading stock indices patterns are formed after extended stock indices market indices trend either upwards or downward & these reversal stock indices chart patterns signal that the stock indices trading market indices trend is ready to reverse.
1. Reversal Stock Indices Setup Patterns
- Double Tops Reversal Patterns
- Double Bottom Reversal Chart Setup Patterns
- Head and Shoulders Reversal Patterns
- Reverse Head and Shoulders Reversal Patterns
Double Tops
Double tops stock indices pattern setup is a reversal stock indices chart pattern setup which forms after an extended upwards indices trend. As its name implies, this pattern setup is made up of two consecutive peaks which are roughly equal, with a moderate trough between.
Summary:
- Double tops stock indices trading pattern forms after an extended move upward
- Double tops stock indices chart pattern setup formation shows that there will be a reversal in stock indices trading market
- We sell when stock indices price breaks below the neck line point: see below for explanation.
Example of Double Tops Reversal Chart Pattern on a Indices Chart
Double Bottom
Double bottoms stock indices pattern setup is a reversal stock indices pattern setup which forms after an extended downward indices trend. It is made up of two consecutive troughs which are roughly equal, with a moderate peak between.
Summary:
- Double bottoms stock indices chart pattern forms after an extended move downward
- Double bottom stock indices chart pattern setup formation shows that there will be a reversal in stock indices trading market
- We buy when stock indices price breaks above the neck line point: see below for explanation.
Example of Double Bottoms Reversal Chart Pattern on a Indices Chart
Head & Shoulders Pattern
Head and Shoulders stock indices pattern setup is a reversal stock indices pattern setup which forms after an extended Indices upwards trend. It's made up of 3 consecutive peaks, the left shoulder, head and the right shoulder with two moderate troughs between the shoulders.
Summary:
- Head and Shoulders stock indices trading pattern forms after an extended move upward
- Head & Shoulders stock indices chart pattern setup formation shows that there will be a reversal in stock indices trading market
- Head & Shoulders stock indices chart pattern formation resembles head with shoulders thus its name.
- To draw the neck-line we use chart point 1 and point 2 as displayed below. We also extend this line in both directions.
- We sell when stock indices price breaks below the neck line point: see the chart below for explanation.
Examples of Head and Shoulders Reversal Chart Pattern on a Indices Chart
Reverse Head and Shoulders Pattern
Reverse Head and Shoulders stock indices pattern setup is a reversal head and shoulders stock indices pattern setup which forms after an extended Indices Trading downward trend. It resembles an up-side down head shoulders.
Summary:
- Reverse Head and Shoulders stock indices chart pattern forms after an extended move downward
- Reverse Head and Shoulders stock indices chart pattern setup formation shows that there will be a reversal in stock indices trading market
- Reverse Head and Shoulders stock indices chart pattern formation resembles is upside-down, therefore the name Reverse.
- We buy when stock indices price breaks above the neck line point: see the chart below for explanation.
Example of Reverse Head and Shoulders Reversal Chart Pattern on a Indices Chart
Reversal Stock Indices Setup Patterns Lessons
Double Tops Stock Indices Patterns & Double Bottom Setup Patterns