Head and Shoulders is a technical indicator with a chart pattern of three peaks, where the outer two are close in height, and the middle is the highest. The name derives from its resemblance to the shape of a human head and shoulders . Head and shoulders patterns occur more often in markets that have high volatility such as crashes in bull markets or in bear markets.The head and shoulders pattern is a reversal indicator that forms after an uptrend. The pattern is made up of three peaks, with the middle peak being the highest and first two being lower. At some point, prices will break below the neckline (the trend line between the second and third peaks). This signals that a reversal has occurred and a downtrend may begin.Diagram of Head and Shoulders Pattern:-In the above diagram we can see that it start with the left shoulder and reach to the neckline after it goes above create left shoulder create a head after it reach to the neckline again create right shoulder, here we can see that it break the neckline and the price is goes down.The head and shoulders pattern is one of the most reliable reversal patterns in technical analysis. It forms after an uptrend and signals that a reversal has occurred. The pattern is made up of three peaks, with the middle peak being the highest and first two being lower. At some point, prices will break below the neckline (the trend line between the second and third peaks). This signals that a reversal has occurred and a downtrend may begin.
