Head and shoulders: what's your confirmation?

The head-and-shoulders reversal pattern is famous enough to be self-fulfilling — and fake enough to need strict rules. The neckline break is the classic trigger, but breaks alone fail regularly.

Head and shoulders: what's your confirmation? — candlestick anatomy diagram
The parts of a candlestick: wick, body, open and close

How do you trade it?

  • the neckline definition you use (horizontal, sloped)
  • your entry: break, retest, or measured move
  • how you handle the pattern failing
Head and shoulders: what's your confirmation? — risk-reward diagram
A risk-reward ratio of 1 to 2

The chart patterns guide walks through the structure.

Comments

Log in to join the discussion. Comments follow the community guidelines.

Log in to comment

Loading comments…