Head and Shoulders
Head and Shoulders is a technical analysis pattern used in stock trading. It is a chart pattern that is used to identify potential reversals in the price of a security. The pattern is composed of three peaks, with the middle peak being the highest and the two side peaks being lower. The pattern is considered to be a reliable indicator of a potential reversal in the price of a security.
History of the Term
The term “Head and Shoulders” was first used in the late 19th century by Charles Dow, one of the founders of Dow Jones & Company. Dow used the term to describe a chart pattern that he observed in the stock market. The pattern was later popularized by William Peter Hamilton in his book, The Stock Market Barometer. Hamilton used the term to describe a chart pattern that he observed in the stock market.
The pattern has since become a popular tool for technical analysis and is used by traders to identify potential reversals in the price of a security. The pattern is considered to be a reliable indicator of a potential reversal in the price of a security.
Table of Comparisons
| Pattern | Reliability |
|---|---|
| Head and Shoulders | High |
| Double Top/Bottom | Medium |
| Triple Top/Bottom | Low |
Summary
Head and Shoulders is a technical analysis pattern used in stock trading. It is a chart pattern that is used to identify potential reversals in the price of a security. The pattern is composed of three peaks, with the middle peak being the highest and the two side peaks being lower. The pattern is considered to be a reliable indicator of a potential reversal in the price of a security. For more information about this term, you can visit websites such as Investopedia, The Balance, and Investing.com.
See Also
- Double Top/Bottom
- Triple Top/Bottom
- Cup and Handle
- Flag and Pennant
- Rising Wedge
- Falling Wedge
- Symmetrical Triangle
- Ascending Triangle
- Descending Triangle
- Rounding Bottom
