Head and Shoulders Pattern

Tell the truth, this is what you’re thinking, right? (Not a bad thought, honesty.)

head and shoulders joke

Other than this girl’s lovely smelling hair the Head and Shoulders pattern, once recognized can show us if the price will continue upwards or downwards. This pattern can be recognized if we select the Line Chart option on our MT4. In order for us to do that let’s go ahead and click right here:

Line Chart option

Alright, so now that we have a clear line chart it’s easy for us to spot the Head and Shoulders pattern.

Let’s have a look at the below image before we describe it further:

Head & Shoulders

So, as you can see once the Head and shoulder pattern is recognized the Support line is drawn on it’s base. We will then be able to qualify if we are on the way up or down if this line is broken or not, after it’s full formation. Let’s have a look at a reverse Head & Shoulders pattern below. With this one we can see that the price broke it’s support line and then continued it’s upwards movement.

Head & Shoulders (upside-down)

Great, now let’s look at many forming for us.

Head & Shoulders (many)