Head and shoulders
Technical analysisA reversal pattern of three peaks with the middle highest, completed on a break of the neckline.
In plain terms
Three rallies, each recruiting fewer buyers. Volume must fade into the right shoulder.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 2 terms
Read the full lesson →
Random walk
Technical analysisAlso called: Random walk hypothesis
A price series generated purely by chance, in which each step is independent of the ones before it.
In plain terms
Plot 250 coin flips and you get trends, levels, breakouts and a passable head and shoulders. Chart readers cannot reliably tell one from a real series — which is why "it looks like a clean setup" is not evidence.