In this post, I will guide you on how to trade Head and should patter in Trading.
Head and shoulder pattern is the mostly and best trading method for forex and commodity and stock market trader. Reason being the very Good Risk reward opportunity.
Risk Reward in Head and shoulder pattern trader can be calculated with measure fibos from Swing low to swing high or even extension target if there is a measure move. By measure move I mean to say if there are equal swing high after breakout of strong support and resistance.
You first need to make some changes way you trade as Mostly all pattern at sometime frame show head and shoulder pattern but they have very high failure rates and very rare opportunity triggers the desired result. Reason by Left Shoulder kink.
Left should is the most important point to be considered when You trade head and shoulder pattern. Left should rejection and price retest those levels is critical after engulfed and make new highs. Specially, if new high is made after breaching strong level of resistance (Vice-e-versa for support).
In the example above, we have witness a strong breach resistance with purpose & while price get back to the area, it hold the area but there were no considerable rallies to count for possible buyers at those level. Price easily breach the area and test the support below and try to create a base around the previous swing low.
Also Read :- How I manage to pick top in Crude oil WTI
Price rise and create a stop hunting zone market with blue horizontal line, After few sessions price try to test the rising trendline but stalled again at the resistance. So called move is know as stop hunting zones. There are possible sellers above the stop hunting zone & When Price usually breach such levels, then It use to create panic with a candlesticks pattern above the hunting zone, which was in this case as double marabozou bullish candles. All the hints of possible strong decline to test the next support zone & that is why I want to check this post and over and over again to get desired results when you try to trade head and should pattern in trading.
This is all you need to know when you trade Head and shoulder pattern, I would recommend to put stops just above the swing high of last retest zone and target atleast 4 to 5 times of reward . If there are new zone below or strong support, avoid trading such patterns and work on your risk reward. There are easily couple of very good setups in a month on every pair visible in a month.
Stay tuned for more & happy Trading .
Head and shoulder pattern is the mostly and best trading method for forex and commodity and stock market trader. Reason being the very Good Risk reward opportunity.
Risk Reward in Head and shoulder pattern trader can be calculated with measure fibos from Swing low to swing high or even extension target if there is a measure move. By measure move I mean to say if there are equal swing high after breakout of strong support and resistance.
You first need to make some changes way you trade as Mostly all pattern at sometime frame show head and shoulder pattern but they have very high failure rates and very rare opportunity triggers the desired result. Reason by Left Shoulder kink.
Left should is the most important point to be considered when You trade head and shoulder pattern. Left should rejection and price retest those levels is critical after engulfed and make new highs. Specially, if new high is made after breaching strong level of resistance (Vice-e-versa for support).
Download my Supply and demand Strategy e-book on Crude Oil Futures here
In the example above, we have witness a strong breach resistance with purpose & while price get back to the area, it hold the area but there were no considerable rallies to count for possible buyers at those level. Price easily breach the area and test the support below and try to create a base around the previous swing low.
Also Read :- How I manage to pick top in Crude oil WTI
Price rise and create a stop hunting zone market with blue horizontal line, After few sessions price try to test the rising trendline but stalled again at the resistance. So called move is know as stop hunting zones. There are possible sellers above the stop hunting zone & When Price usually breach such levels, then It use to create panic with a candlesticks pattern above the hunting zone, which was in this case as double marabozou bullish candles. All the hints of possible strong decline to test the next support zone & that is why I want to check this post and over and over again to get desired results when you try to trade head and should pattern in trading.
This is all you need to know when you trade Head and shoulder pattern, I would recommend to put stops just above the swing high of last retest zone and target atleast 4 to 5 times of reward . If there are new zone below or strong support, avoid trading such patterns and work on your risk reward. There are easily couple of very good setups in a month on every pair visible in a month.
Stay tuned for more & happy Trading .
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