# Head and Shoulders Pattern: How to Identify Market Reversal



Have you heard of the Head and Shoulders pattern (OCO)? It's like that "alert signal" that the chart gives before a trend change.

The structure is quite visual: imagine two smaller peaks (the shoulders) with a larger peak in the middle (the head). An imaginary line (the neck line) connects the lows between them. When the price falls below this neck line, the signal is confirmed.

**Why does this matter?** The OCO usually appears at the end of a bullish trend and indicates that momentum is weakening. The reliability is about 70%, making this pattern a reliable tool for traders to anticipate market reversals.

It's like reading the language of the chart: when you see this, it could be that people are starting to sell.
View Original
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
0/400
No comments
  • Pin
Trade Crypto Anywhere Anytime
qrCode
Scan to download Gate App
Community
  • 简体中文
  • English
  • Tiếng Việt
  • 繁體中文
  • Español
  • Русский
  • Français (Afrique)
  • Português (Portugal)
  • Bahasa Indonesia
  • 日本語
  • بالعربية
  • Українська
  • Português (Brasil)