chart patterns (head and shoulders)

View Poll Results: do you use chart patterns

Voters
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  • yes

    7 87.50%
  • no

    1 12.50%
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Thread: chart patterns (head and shoulders)

  1. #1

    Lightbulb chart patterns (head and shoulders)

    head and shoulders


    Hello
    I have decided to start a series of topics related to chart patterns because of their importance in understanding price behavior and anticipating its movements
    so today we will start with one of the most popular patterns, which is the head and shoulders pattern

    What is it :

    The head and shoulders pattern is three peaks, where the middle peak (head)is the highest while the other two peaks(shoulders) are about the same height
    ps: it's not necessary for the shoulders to be at the same hight


    -how to trade this pattern :

    entry point:
    well the basic way to trade this pattern is to wait for the price to break out the neck trend line
    target:
    We take a trend line that we put vertically from head to line
    Then we pull the trend line and put the upper end at the break point of the neckline
    The other end will be the take profit level



    stop loss:
    There are two options to determine a stop loss
    The first is to put it above the head, the second is to put it above the right shoulder

    eurcad-e-h4-roboforex-cy-ltd.jpg


    Confirmations:

    One of the things I look for when I find the pattern is a divergence between the head and the right shoulder (using the macd or other oscillator indicators)
    read more about divergence here How-do-I-use-Divergence-in-my-trades
    eurcad-e-h4-roboforex-cy-ltd-2.jpg
    The pattern may also appear at previous resistance levels and this is a good confirmation that makes the pattern more effective
    eurcad-e-d1-roboforex-cy-ltd.jpg
    Also when you find this pattern, you may find that it forms one of the candle patterns on a larger time frame (pin bar, engulfing)
    eurcad-e-mn1-roboforex-cy-ltd.jpg
    Last edited by tfs2012; 09-30-2018 at 03:30 PM.

  2. #2
    thank you for sharing the knowledge here, in this forum, the head and shouder candlestick patterns are very good, I also sometimes use them, in my own forex trading, but I am often fooled by this candlestick pattern, if in a position it is broken then I open a SELL position, but the movement is increasing, so it is often touched by the stop loss.

  3. #3
    Hello sir...
    I think you are confused. There is no such a thing as " head and shouder candlestick patterns "
    There are candle patterns which are associated with candle shapes only and there are chart patterns which are the geometric shapes made by the price.

  4. #4
    I voted yes on your thread because I apply many chart patterns such as head shoulder in this thread and gave me satisfying trade in reversal. I don't apply any indicators when trading with chart patterns because I prefer to trade in naked chart and switch my view from candlestick to line to confirm if it's valid patterns or not. I also change the view of market through different time frames to confirm the patterns before I trade them.

  5. #5
    Certainly, head and shoulder pattern is my favorite pattern to trade. Already i vote yes. When I get this pattern with the h4 time frame I open long trade. I do not feel to use any indicator with them. All-time i am not won but small time frame with head and shoulder does not work what I expect totally. While the price at the right shoulder makes a bounce from below the neck and pull back to just i open a trade.

  6. #6
    Trader
    Join Date
    Jul 2017
    Posts
    8,577
    Simple and straight forward and good explanation on the head and shoulder trading system.i know that so much have been said and discussed about the head ans shoulder trading system in this forum in the past, but you just took a new and simple dimension about this trading system at least i am very sure that with this deep explanation , every trader should be able to use this system to trade the market . Your understanding and analysis on this thread is very great.

  7. #7
    Trader
    Join Date
    Aug 2015
    Posts
    12,807
    glory3, there is huge difference in knowledge and experience, open any strategy on internet and just try to understand it you will surely believe on it and think with that strategy you can become rich but whenever you will apply it on account it will be totally different, like in history when we apply any indicator it works well but in prediction we become confuse

  8. #8
    Head and shoulders is a very common pattern in trading. I basically wait for the breakout of the neckline before entering long or short. It. may be more conservative though to wait for an unsuccessful retest of the broken neckline before entering a trade. Sometimes there could be false breakout, so its good to be careful

  9. #9
    Basically that chart pattern head and shoulder always be formed if when a movement the trend will the end. The part of head in pattern is the most top the price on the chart. And the shoulder level in pattern as spot area rejection the market, but always pullback again the trend it to the new movement of the trend, because that this has called as head and shoulder pattern.
    Trade with your eyes and not trading with what you wish impossible

  10. #10
    Trader
    Join Date
    Aug 2013
    Posts
    11,572
    head and shoulders are good patterns for trading and let the trader to trade with good positions and so the trading can be successful and effective and help for making of some profits, i prefer to use the head and shoulders on the higher time frames especially the daily time frame because the signal is strong on it.

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