Head and Shoulders is a reversal graphic pattern that signals the end of the current trend and a possible reversal. One of the most recognizable patterns in technical analysis.
🎮 Structure of the pattern:
🔹 Left shoulder — the first wave of growth followed by a correction.
🔹 Head — a higher peak and a pullback.
🔹 Right shoulder — the rise is weaker than the head, it forms lower and is followed by a decline.
🔹 Neck line — a support level connecting the troughs between the shoulders.
🤓 How to apply the Head and Shoulders pattern:
▪️ The pattern forms after an upward trend.
▪️ A breakout of the neck line downwards is a sell signal.
▪️ The profit target is measured from the top of the head to the neck line and is projected down from the breakout point.
🧐 Application strategies:
🔹 Selling on the breakout of the neck line is a classic entry strategy.
🔹 A retest of the neck after the breakout is a confirmation signal; you can enter after a re-touch.
🔹 Profit fixation — at the projection of the height of the head from the neck line.
📌 There is also a reverse pattern — Inverted Head and Shoulders, which works similarly but in a downtrend and signals a possible rise.
✔️ Recommendations:
🔸 It is better to trade after the breakout and confirmation (retest) of the neck line.
🔸 Combine with volumes: an increase in volume at the breakout strengthens the signal.
🔸 Use in conjunction with support/resistance levels, candlestick patterns, and indicators.
☝️ Remember: Head and Shoulders is not just a shape, but a signal of a change in market sentiment. Don't rush — wait for clear formation and breakout. #Bitcoin2025 #cryptooinsigts #BTC☀️
