Head and Shoulders Pattern
This is a reversal pattern, usually indicating that the market will turn to a decline. After a certain period of time and a certain amount of rise, the price begins to repeat and test the support level. The head and shoulders top pattern consists of three high points, the middle high point is the highest (head), and the two high points on the left and right are relatively low (shoulders). When the price falls below the neckline formed by the support points, it usually indicates that the market will turn to a decline.
Generally speaking, breaking below the neckline can be determined as the position for opening a short position. The theoretical falling target (satisfaction point) is the distance between the high point of the head and the neckline. If the neckline is crossed again, it is determined as a failed head and shoulders top pattern, and the stop loss is exited.
