TRADING GLOSSARY
Head and shoulders
Head and shoulders is a chart pattern with three peaks, where the middle peak is higher than the other two. The intervening lows define a neckline; a break below it is commonly interpreted as a possible bearish reversal, not a guaranteed outcome.
EXAMPLE
On a hypothetical chart, peaks form at 110, 120 and 111; price then falls below the neckline connecting the intervening lows.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure