Head and shoulders pattern

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The head and shoulders pattern is a reversal patter from a bullish trend to a bearish trend. For a head and shoulders pattern to be confirmed it has to be after a bullish trend of higher highs and lower lows, the trend should then retract to form a trough, then continue up above the previous high. Then retract once again causing a second trough, after this the it needs to continue up to the level of the first peak then retract back to the two previous lows. The two support prices caused by the troughs can be drawn across producing a “neck” line. This is the head and shoulders pattern confirmed and the price is expected to continue past the “neck” line continuing the bearish trend.


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