Price Patterns

Head and shoulder is a type of price pattern used in technical analysis. The conditions for Head and shoulder are: 1. Three tops with one month gap between each one of them should be formed. 2. The first(left) and third (right) top should be equivalent, the middle top should be higher than the other tops. so that the middle top looks like the head and the remaining two like shoulders. 2. The trade volume should be high between the lift top and middle. Trade volume should be low between the middle top and the right top. 3.After the right top price should continue to fall below, crossing the neck line. If these conditions are satisfied then it means that bearish trend has began, we can go for short position.