๐ฅ Traders call this the most reliable trend-reversal signal โ and for good reason. If you can spot this, youโre ahead of 90% of the market.
๐ What It Looks Like:
Imagine three mountain peaks:
The left shoulder forms after a rise and a slight dip.
The head is the highest peak โ a stronger push upwards.
The right shoulder forms with a lower high.
All this happens along a support line known as the neckline.
When price breaks below the neckline, itโs often game over for the uptrend.
๐ Why It Works:
It shows buyers are losing strength with each push.
Volume often decreases with each peak โ a sign of fading momentum.
The final break below the neckline confirms a bearish shift.
๐ What It Signals:
โก๏ธ A trend reversal from bullish to bearish. โก๏ธ Great for spotting short opportunities or closing long positions early. โก๏ธ Powerful on longer timeframes (4H, Daily, Weekly) โ the bigger the timeframe, the stronger the signal.
๐ฐ Pro Tip for Traders:
๐ Combine this with volume analysis and RSI divergence. ๐ The more symmetrical the shoulders, the more reliable the pattern. ๐ Use the height from head to neckline to estimate the price drop after the breakout.
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