How to use the head and shoulders pattern to get more profit?

The "head and shoulders pattern" is easily understood from its name. It is a reversal bearish signal:

It is a bearish pattern that appears close to the end of an upward trend, formed by the left shoulder, head, right shoulder, and neckline.

The key points of the pattern are:

①: The trading volume of the left shoulder is the largest, the trading volume of the head is slightly smaller, and the trading volume of the right shoulder is the smallest, 【the trading volume shows a decreasing trend】.

②: A divergence between volume and price often forms at the top.

③: Pay attention to the trading volume during the breakout; sometimes the head and shoulders pattern does not necessarily require trading volume during the breakout process.

The practical advice is:

1. Stop trading: from the high point to the neckline. Stop loss: from the right shoulder to the neckline.

2. If its neckline is tilted downwards, it indicates that the market is very weak and powerless.

3. If the high point of the right shoulder is higher than the head, the pattern cannot be established.

4. As long as the bearish candlestick closes below the neck line, first reduce the position and then discuss.

5. If a large amount is released when it breaks down, do not wait for a false break confirmation.
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