What is a head and shoulders candlestick pattern?

The Head and Shoulders Candlestick Pattern can be used on your trading platform charts to help filter potential trading signals as part of an overall trading strategy. The Head and Shoulder Pattern illustrates the movement of the price and can help to spot potential reversal trades. Yet, the pattern has some drawbacks.

What is a head and shoulders chart pattern?

The head and shoulders chart pattern refers to a bearish reversal formation on the candlestick chart to help traders identify a reversal coming after a trend has ended. While the bullish setup incurred that it is an inverse head and shoulders. In a chart formation, they usually appear as a baseline with three-peaks.

What is a candlestick pattern & how does it work?

As the candlestick pattern is a transformation of bullish to bearish, it only provides sell signals. They can appear on forex currency pairs, stocks, indices, cryptocurrencies, commodities, metals, energies, gold, silver and more.

What is the opposite of the head and Shoulders pattern?

The opposite of the Head and Shoulders Pattern is the Inverse Head and Shoulders. It appears in a downtrend and signals a reversal from the bearish pattern to a bullish pattern. Sometimes when the Head and Shoulders Pattern is present, the price breaks through the resistance level, indicating a bearish pattern, it is known as a double top.