Is Head and Shoulders Pattern Bullish or Bearish? - Head and Shoulders Chart Pattern

Technical Analysis of Head and Shoulders Pattern - Example of Head and Shoulders Pattern

Head and Shoulders Chart Pattern is a Bearish Forex Pattern - Head and Shoulders Pattern is a Bearish Forex Signal Pattern

Summary:

• This Head and Shoulders Pattern forms after an extended move upward - forex upwards trend
• This Head & Shoulders Chart Pattern formation indicates that there will be a reversal in the forex trading market
• This Head & Shoulders Chart Pattern formation looks like a head with shoulders thus its name.
• To plot the neckline we use chart point 1 & point 2 as shown on example below. We also extend this line in both directions.
• We sell when the price breaks-out below neck-line: as described on the example below.

What Does Head & Shoulders Chart Pattern Mean? - What Happens to Forex Price Action After a Head and Shoulders Chart Pattern?

Or the head & shoulders chart pattern can also form on a slanting neck line, like the example below:

What Does Head & Shoulders Chart Pattern Mean? - What Happens to Forex Price Action After a Head and Shoulders Chart Pattern?

Examples of Head & Shoulders Forex Pattern on a Chart

Technical Analysis of Head and Shoulders Pattern - Example of Head and Shoulders Chart Pattern

This Head and Shoulders Pattern can also be formed on a slanting neck line, like the head and shoulders pattern example above, neck line does not have to be necessarily horizontal.