On this chart, a first high is made before coming down and testing a bottom before bouncing to new highs. For a true head and shoulders pattern to form, there should be a common level of support underneath the shoulders. And, the uptrend in this picture eventually turned into a downtrend making this a real head and shoulders pattern.

-A head and shoulders pattern can help traders spot a reversal

-The pattern starts with one high followed by a higher high, and a low high

-There is often a common level where each shoulders find support