"Head and Shoulders" pattern generally has the following characteristics.
(1) The high points of the left shoulder and right shoulder are basically within the same price range. The term "within the same price range" means that their levels are quite similar; sometimes the height of the right shoulder may be slightly lower than the left shoulder, causing the neckline to tilt down a bit. In this pattern, the probability of price decline is slightly higher.
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(2) The trading volume of the "Head and Shoulders" pattern is generally largest at the left shoulder, second largest at the head, and the smallest at the right shoulder among the three high points.
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(3) After the price breaks below the neckline of the "Head and Shoulders" pattern, there may be a rebound, but it generally will not rebound above the neckline of the "Head and Shoulders" pattern. In the diagram, the neckline of this "Head and Shoulders" pattern is the line connecting two relative low points, which are point B and point D. These two low points are basically at the same level, so the neckline is a horizontal line. However, in actual market conditions, most "Head and Shoulders" patterns do not have their two relative low points at the same level, so the necklines of the "Head and Shoulders" pattern are mostly slanted.