What does the head and shoulders pattern look like? What is the head and shoulders pattern

The head and shoulders pattern is a pattern formed by a reversal of the stock price trend, which is a signal that the stock price is turning from a bullish trend to a downward trend, or from a downward trend to a rising trend. It is divided into the following different sections:

1. Left shoulder part: The trading volume is very large for a period of rising time, and those who bought at any time in the past are profitable, so they begin to sell profitably, so that the stock price has a short-term fall, and the transaction has decreased significantly compared with the time when it rises to its peak.

2. Head: After a short retreat in the stock price, there was another strong rise in transactions. The highest point of volume is significantly lower than that of the left shoulder. The stock price rose above the last high and then retreated again. Volumes also decreased during this period of decline.

3. Right shoulder part: The stock price is close to the last low point and then gets support to rebound, the sentiment of market investment has weakened significantly, the transaction is significantly lower than the left shoulder and the head, and the stock price cannot reach the high point of the head and falls, so the right shoulder part is formed.

4. Breakthrough: From the top of the right shoulder** to penetrate the bottom neckline connected by the bottom of the left shoulder and the bottom of the head, the range of breaking through the neckline should exceed the market price by more than 3.

The pattern is as follows: <>

The head and shoulders move to form three distinct peaks with slightly higher peaks in the middle than on both sides. The three peaks, from left to right, are called the left shoulder, the head, and the right shoulder. Transactions at the top of the head and shoulders often show a cascade down.

A head and shoulders top is a turnaround technical pattern that often signals the end of a bull market, but also often at the top of a medium-term trend.

The head and shoulders scatter core pattern is a standard head ** pattern, which is easy to encounter in actual combat operations, and after the right shoulder is determined, the market will have a lot of decline, therefore, mastering the head and shoulders pattern can allow us to avoid unnecessary losses.

When investors carry out actual combat operations, they must pay attention to whether the operation is a head-and-shoulders head-to-head pattern, once the hail is found to be this form, no matter what kind of position it is, we must be ready to go out at any time, and its great lethality.

The analysis of this pattern is:

1) This is a long-term trend reversal pattern that usually occurs at the end of a bull market.

2) When the volume of the most recent high is lower than the previous high, it hints at the possibility of a head and shoulders top; When the stock price fails to rise above the previous high after the third recovery, and the transaction continues to decline, experienced investors will seize the opportunity to sell.

3) When the head and shoulders neckline breaks, it is a real sell signal, although the stock price has fallen by a considerable amount compared with the highest point, but the decline is just beginning, and investors who have not shipped continue to sell.

4) When the neckline is broken, we can measure the level at which the stock price will fall according to the least decline of this pattern**. The method of measuring this is to draw a vertical line from the highest point of the head to the neckline, and then start to make a noise at the point where the right shoulder breaks through the neckline, and measure the same length downward, so that the ** measured is the minimum amplitude of the strand **.

The head and shoulders top pattern is a bearish pattern near the end of ****. Among the various methods of technical analysis, the head and shoulders top is one of the most common** patterns to predict the formation of market swing heads. In the process of formation, the left shoulder has the largest volume, the head has a slightly smaller volume, and the right shoulder has the smallest volume, and the trading volume is decreasing.

What should be paid attention to in the head and shoulders trend.

In general, the left and right shoulders have roughly equal heights, and the right shoulder on top of some head and shoulders is lower than the left shoulder. However, if the high point of the right shoulder is higher than the head, the pattern cannot be established.

The head and shoulders is a very lethal pattern, and usually its drawdown is greater than the least measured drawdown.

The head and shoulders pattern may fail, but the unfinished head and shoulders pattern suggests that there is still life, but the real reversal may be coming soon.

Head and shoulders, as the name suggests, consists of the left shoulder, the head, the right shoulder and the neckline. Graphically, the height of the left and right shoulders is basically the same, and the highest point of the head is higher than the left and right shoulders; The two lows formed when the stock price failed to rush up and fell back on the left and right shoulders were basically on the same level. This same horizontal line is the neckline, and when the stock price fails to rise and fall back for the third time, this neckline will be broken, so the head and shoulders top is officially declared.

Tools Raw Material Steps Method In the process of head and shoulder whisker formation, the volume of the left shoulder is the largest, the volume of the head is slightly smaller, and the volume of the right shoulder is the smallest. The trading volume shows a decreasing trend, indicating that the chasing force is getting weaker and weaker when the stock price rises, and the stock price has the meaning of rising to the end.

Initially, the bulls kept pushing the stock price up, and the market sentiment was high, and there was a lot of trading. After a short-term pullback correction, those who missed the last rally took the opportunity to buy, pushing the stock price up for the second time, past the previous high, and into the head. On the surface, Xing Sui is still optimistic, but in terms of trading volume, it is not as good as before, and the bulls have weakened.

In the head**, those who have no confidence in the prospect and missed the return of the last high, or those who hold positions at the low point of the pullback, have sold, and the stock price has fallen again. The second time, the stock price was unable to exceed the head, the trading volume was further **, the shareholders reached a consensus, completely bearish on the market outlook, and the market outlook was expected to be weak and weak, so a big fall came when it fell below the second low.

The head and shoulders top is a peak signal, and once the head and shoulders top is officially formed, the ** of the stock price is almost a foregone conclusion. When a black candle breaks through the neckline on which the bulls depend, and the stock price is below the neckline, the head and shoulders pattern declares that the judgment is basically established. Coming to this bottom, investors should recognize the trend, and timely stop loss out is the best choice at present.

In practice, the key to correctly identifying the head and shoulders top pattern is to look at the trading volume, the trading volume of the three lead disadvantage peaks is decreasing in turn, the trading volume of the left shoulder is the largest, and the trading volume of the right shoulder is the smallest.

The use of the head and shoulders top pattern in actual combat helps investors to escape from the top in time and seize the short-term in the pattern.

Question 1: What is Head and Shoulders?

Question 2: What does head and shoulders mean?

The head and shoulders are the peak pattern of the upward reversal of the Kaixiang faction. Once this pattern is confirmed, the magnitude of ** can be very large, and its reversal is much more lethal than other reversal patterns, and the stock price or index will turn into a downward trend. Before determining the pattern, aggressive investors should take advantage of the end of the rally and clear their goods as soon as possible. After breaking below the neckline, it will be a real sell signal.

Head and shoulders top-shape features.

1. It mostly occurs at the end of the bulls' ** or the high point of the ****. Yan Hong.

2. Whether the head and shoulders are formed or not can be judged from the trading volume, and the most obvious feature is that the right shoulder volume is the smallest.

3. The height of the left and right shoulders is not necessarily the same height, and the neckline is not necessarily horizontal.

4. The number of left and right shoulders is not necessarily only one, nor does it necessarily present a symmetrical number of staring, this kind of head and shoulders can be called compound head and shoulders top, as shown in the example is the compound head and shoulders top.

Head and shoulders ** judgment.

1. When it falls below 3% of the neckline, the pattern can be established, and the selling strategy can be adopted.

2. The minimum drop in the estimated index is about the vertical distance from the head to the neckline.