Description: Three successive peaks: middle is the highest and the two outside lower and relatively equal in height. It forms after an uptrend and often signals upcoming trend reversal (from bullish to bearish). The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns.Trade: Wait for pattern to complete and price to break out – to move lower than the neckline after the peak of the right shoulder. The most common entry point is when a breakout occurs – the neckline is broken and a SELL trade is taken.
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