#1 of 10 Chart Patterns Every Trader Needs to Know - Head and Shoulders
Updated: Mar 7
Chart patterns are an integral aspect of technical analysis, but they require some getting used to before they can be used effectively. We would rank this #1 out of the top 10 patterns every trader needs to know. The famous Head and Shoulders Chart Pattern.
Head and Shoulders Pattern
The head and shoulder is a chart pattern in which a large peak has a slightly smaller peak on either side of it. Traders look at head and shoulders patterns to predict a bullish-to-bearish reversal.
Most common, the first and third peaks will be smaller than the middle (or second peak) but all peaks in the pattern will fall back to the same support level, otherwise known as the pattern's 'neckline'. Once the third peak has fallen back to its level of support, it is very likely (yet not guaranteed) that it will break out into a bearish downtrend.
If you flip the pattern, known as a reversed head-and-shoulder pattern, the same scenario will play out but in favor of a bullish trend.
Ready to Test Your Skills as a Futures Day Trader?
Did you know that day traders no longer need to use their own personal money to start or build their trading business?
UProfit Trader is looking for day traders to join their team and will fund futures traders up to $100,000 through their prop fund trading program.
This provides the opportunity for anyone to start their career as a pro day trader without all the risk. It's simple, you select the level of funding, a 10-day trading evaluation is started to test your skills and prove your trading consistency. Once you pass, UProfit Trader will fund your account as a Pro Trader. The only requirement, you trade and UProfit Trader funds while you keep 80% of the profits. It's that simple.
Learn how they are making it possible for anyone to start a day trading career. Learn More >>