In this example, we can easily see the head and shoulders pattern.
The head is the second peak and is the highest point in the pattern. The two shoulders also form peaks but do not exceed the height of the head.
With this formation, we put an entry order below the neckline.
We can also calculate a target by measuring the high point of the head to the neckline. This distance is approximately how far the price will move after it breaks the neckline.