Head and Shoulders Pattern

Basic Chart Patterns: Head and Shoulders Chart Pattern

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Basic Chart Patterns : Head and Shoulders Chart Pattern

Head and Shoulders Chart Pattern

This is the second post of the basic chart patterns series in which you are going to learn the complete details about the Head and Shoulders Chart Pattern and the Inverse Head and Shoulders Chart Pattern such as the formation, identification and trading strategies of these chart patterns.

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Head and Shoulders Chart pattern

The head and shoulders pattern is a trend reversal pattern. There are two types of head and shoulders pattern, the standard head and shoulders pattern found at the end of an uptrend and the inverse head and shoulders pattern found at the end of a downtrend.

types of head and shoulders pattern

 

Identifying Head and Shoulders Chart pattern

First of all lets look at the standard head and shoulders pattern and how you can trade it. Due to the head and shoulders being a reversal pattern, you want to look for it after a big up move.

The pattern is identified by its left shoulder, head, right shoulder and neck line.  Now that you know what the pattern looks like.

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