what does the head and shoulders pattern tell you 
the head and shoulders pattern indicates that a reversal is possible 1 traders believe that three sets of peaks and troughs with a larger peak in the middle means a stock s price will begin falling the neckline represents the point at which bearish traders start selling the pattern also indicates that the new downward trend will likely continue until the right shoulder is broken where prices move higher than the prices at the right peak advantages and disadvantages of the head and shoulders patternexperienced traders identify it easilydefined profit and riskbig market movements can be profited fromcan be used in all marketsnovice traders may miss itlarge stop loss distances possibleunfavorable risk to reward possiblewhile traders agree that the pattern is a reliable indicator there is no guarantee that the trend will reverse as indicated 