# 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.
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# 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.