Trading Lucrative-Heads 'N' Shoulders Patterns : Silver 1 HR
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Heads 'N' Shoulders' Patterns can be very lucrative and a pattern to keep in mind every trading day. They work on all time-frames. Often I see market structure price reversals on the 1 minute timeframe all the way down to 10 seconds.
They will be easier to trade on the higher time frames as their price-action can be super-fast on these very low timeframes. Depending on how you apply risk to reward in your trading, they will be more lucrative on the higher timeframes and more reliable because more traders see them on these bigger timeframes right up to weekly and monthly charts.
Here is what you need to know:
* Take advantage of the tradingview 'All Charts' pattern recogniser. This is what most traders including professional-traders would be using because it eliminates subjectivity.
* Draw your neckline from the bottom of left-shoulder across and beyond where the right shoulder comes down (price will be below to the left of the right shoulder & your exact point for the left shoulder will be under & to the right of left shoulder)
* Most often price will in the first instance after the right shoulder is formed, break through the neckline and then retest above the neck line or below the neck line if its a bullish Inverse Head 'N' Shoulders pattern. Seeing this retest occur will give the setup more reliability.
(Note: Price does not always Retest especially if price is selling or buying from a strong resistance or support area, respectively)
* Your trigger to buy or sell is on the retest/retracement above or below neckline, look for an increase in volume and/or a strong reversal candle like a pin-bar or engulfer.
(Your reward is generally the same distance as the neckline below the head)
* I hope this helps in your own trading. Trading is risky. Please don't rely solely on my financial analysis or trade setups.)
Heads 'N' Shoulders' Patterns can be very lucrative and a pattern to keep in mind every trading day. They work on all time-frames. Often I see market structure price reversals on the 1 minute timeframe all the way down to 10 seconds.
They will be easier to trade on the higher time frames as their price-action can be super-fast on these very low timeframes. Depending on how you apply risk to reward in your trading, they will be more lucrative on the higher timeframes and more reliable because more traders see them on these bigger timeframes right up to weekly and monthly charts.
Here is what you need to know:
* Take advantage of the tradingview 'All Charts' pattern recogniser. This is what most traders including professional-traders would be using because it eliminates subjectivity.
* Draw your neckline from the bottom of left-shoulder across and beyond where the right shoulder comes down (price will be below to the left of the right shoulder & your exact point for the left shoulder will be under & to the right of left shoulder)
* Most often price will in the first instance after the right shoulder is formed, break through the neckline and then retest above the neck line or below the neck line if its a bullish Inverse Head 'N' Shoulders pattern. Seeing this retest occur will give the setup more reliability.
(Note: Price does not always Retest especially if price is selling or buying from a strong resistance or support area, respectively)
* Your trigger to buy or sell is on the retest/retracement above or below neckline, look for an increase in volume and/or a strong reversal candle like a pin-bar or engulfer.
(Your reward is generally the same distance as the neckline below the head)
* I hope this helps in your own trading. Trading is risky. Please don't rely solely on my financial analysis or trade setups.)
Note
In relation to a Stop-Loss:
* One can be placed directly under the reversal-candle that initiates the trade.
In the example above Silver-hourly chart, you could drop to a 15 or 10 minute chart to look for this surge in volume &/or a reversal candle (for example Pin-bar & Engulfing)
* Wait for this reversal candle to close in price on a 15 or 10 minute chart, then when you know that's your strong reversal candle, sell(standard Selling pattern) or buy(inverse H&S pattern) as soon as you can when the next candle starts to open. Your Stop is right under the reversal candle. This is more aggressive but giving very good Risk/Reward.
* Alternatively, a Stop could be placed under the Right-shoulder or very conservatively a Stop could be placed under the Head of the structure.
Disclaimer
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