How do i spot a trough?

[ForexNewbie1]

I am in the school currently @ Middle School so please forgive me if i have already been tought this however im at the stage where its teaching me about heads and shoulders and it says to draw a trend line between the troughs. How do i spot the troughs?

IGNORE THE SECOND IMAGE!

Have i drawn the trend line right?

[SithJawa]

No question is not worth asking You have to remember the entire concept behind the head and shoulders pattern to understand it more clearly

It contains three parts, two shoulders and a head, lets say for instance we are in an uptrend, price is making higher highs and higher lows, and then price picks up speed and shoots straight up past the previous high, after this huge move in price buyers are becoming exhausted and sellers take hold and pull price down to form a lower low (a trough) and a lower high (a shoulder)

Looking at your chart you see the first shoulder is a higher high in the trend, and the very next low after the shoulder is the trough, then we have the large move in price that forms the head, and then when sellers pull price down to make a lower low (the second trough) and a lower high (the second shoulder) we have a complete formation, you want to draw the line between the troughs from the lowest point of the candle bodies of the troughs

Something to note though is that the setup you posted was not a very good head and shoulders pattern, ideally you want the second shoulder to be lower than the first shoulder in price, by having it be higher you cant know whether or not the up trend has broken and the sellers will continue to shoot price down

[ForexNewbie1]

Thanks, given me a better idea for drawing the line. Still learning, its tough but i really want to get there!

[purplepatchforex]

It's not really a head and shoulders pattern at all, but at best head and shoulder patterns are of limited value in themselves, I'd recommend concentrating on cadlestick reading, try reading Candlestick Trading for Dummies, it's very good, gives you the best grounding you can ask for.