📉 Head and Shoulders Pattern – The Key to Reversals! 🔄

The Head and Shoulders pattern is one of the most powerful reversal signals in technical analysis. Understanding its formation can give traders a significant edge in predicting trend changes. Let’s break it down!

🔹 Formation of Head and Shoulders

✅ Left Shoulder – Price rises to a peak and then declines.

✅ Head – A higher peak forms, followed by another decline.

✅ Right Shoulder – A lower peak compared to the head, signaling weakness.

✅ Neckline – The support level connecting the lows of the shoulders. A breakout below this confirms the pattern.

🔥 Why is it Important?

The pattern signals a potential trend reversal from bullish to bearish.

Traders use it to identify entry & exit points effectively.

A break below the neckline confirms the downtrend, offering great shorting opportunities.

📊 Pro Tip: Volume plays a crucial role! A spike in volume during the breakdown strengthens the pattern’s validity.

💡 Mastering chart patterns like this can elevate your trading skills to the next level! Stay tuned for more insights from Ravana Master Trading. 🚀

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