Head and Shoulders Pattern: What Is It & How to Trade With It?

Understanding the head and shoulders chart pattern may seem very convoluted at the beginning. Still, it helps novice and even advanced traders understand the market and speculate based on logic. Most traders seek from this chart pattern the defined areas that allow anyone to set risk levels and take profits specifically.

But, are they reliable to spot trend reversals? Here’s what you must understand and learn how to apply them to predict a bullish to bearish trend reversal critically. 

What Is the Head and Shoulders Chart Pattern?

The head and shoulders chart pattern refers to a bearish reversal formation on the candlestick chart to help traders identify a reversal coming after a trend has ended.