Here is how to trade this pattern:
Label your highest point on the chart as labeled ‘A” and label the previous high as the “left tip.” The left tip is significant because it informs us how high the market was trading earlier which signifies to us how low the market will trade eventually.
Moving back to the A mark, you can draw a line from the fresh highest high to the new lowest low, the B position. Follow that trend to the next highest position to get to position C, and finally to the next low which is your “D”.
In this instance, what you need to do is to buy when the market starts to rally after the D mark. You won’t lose your trade until the market goes beyond the D to reach the newest low.
You know when this will occur because you know the value of the previous high before the start of the King’s Crown started (the left tip).
In instances like this, what you are trading is not the neckline but the breaking point beyond the lowest low. This extra movement in the market lets you see the true indication of the markets and could minimize your future chances of making losing trades.