What is the head and shoulders pattern?
The head and shoulders is a bearish reversal pattern. Three peaks: a higher middle one (the head) between two lower ones (the shoulders), joined underneath by the neckline.
How does the head and shoulders form?
Three peaks: a higher middle one (the head) between two lower ones (the shoulders), joined underneath by a neckline drawn through the lows between them.
How do you confirm a head and shoulders?
The head must make a clear higher high while the shoulders do not. This difference shows momentum building and then fading.
When does the head and shoulders fail?
The neckline break is where most of these fail: price closes below it, then reclaims it within a bar or two, and the shape becomes a range.
No chart pattern works every time. The examples on this page were chosen because they show the pattern clearly, and in real markets patterns fail often.
Practice on real charts
3 real examples of the head and shoulders, cut off where the pattern completed. Make your call, then see what happened.
The shaded area is a head and shoulders. Where did price go next?
