Head and shoulder pattern

Shoulder head shoulder

The head and shoulders pattern is generally regarded as a reversal pattern and it is most often seen in uptrends. The shoulder head shoulder is one of the most typical charting, and indicates a change in the bullish or bearish.

Its name comes from the resemblance to the head and shoulders of a man. It is characterized by initial peak, followed by a second peak and peak followed by a third lower than the second, but roughly equal in height to the first.

The Head and Shoulders bottom is referred to sometimes as an Inverse Head and Shoulders. The pattern shares many common characteristics It is the most important figure for the reliability that has proven over years of research and analysis charting.

Shoulder Head Shoulder Features:

Appears in bull markets.
At the end leads to a downward correction.
It has a high reliability.

It consists of three peaks, the first and last (called shoulder) at similar and the center (called the head) is clearly higher. By joining the minimum separating the shoulders of the head will have the neckline. Ideally have a slightly upward slope. Failing to be horizontal but never clearly bearish tilt. When the price falls below the neckline is triggered formation with a target at low altitude equal to the maximum separating the neckline of the head.

The behavior of the market volume during training tends to be: falling between points 1, 2 and 3. loud the rupture or perforation of the neckline. If a pullback volume should be very low. When the price is heading to the target volume is growing again.

Features Shoulder Head Shoulder reversed

Appears in bear markets.
At the end leads to a downward correction.
It has a high reliability.

It consists of three minima, the first and last (called shoulder) at similar and the center (called the head) significantly lower. By joining the minimum separating the shoulders of the head will have the neckline. Ideally, having a slightly downward slope. Failing to be horizontal but never clearly upward sloping. When the price falls below the neckline is triggered training with a goal to increase equal to the height that separates the neckline minimal head.

The behavior of the market volume during training tends to be: falling between points 1, 2 and 3. loud the rupture or perforation of the neckline. if a pullback volume should be very low. when the price is heading to the target volume is growing again.