Trading Pattern: Head and Shoulders

Trading Pattern: Head and Shoulders Here we go over a visual variation on the highs and lows trading pattern with the head and shoulders trading pattern. This uses the visual top of a up trend to identify a head, and subsequent lows surrounding it as shoulders. This trading pattern can give you a clear neck line that can act as an area to watch being broken, signaling the end of the current up trend in the market where long trades are no longer favored. At that point our focus switches to short trades in the market, and re tests of the neck line area within the trading pattern.