AUDUSD Head and Shoulders Pattern Short We expect further downside on this pair, signalled by the head and shoulders pattern breakout. We can also see the breakout of a key level which further supports our directional basis.
Headandshoulderbreakout
📊How To Trade: H&S Pattern📍How to Identify and Use the Head and Shoulders Pattern
The head and shoulders pattern is characterized by key features to look out for on trading charts. It typically occurs after a bullish uptrend when buying pressure begins to fade. The pattern includes a left shoulder, a higher middle peak, and a right shoulder approximately at the same level as the left shoulder. Additionally, the pattern should have a distinct neckline acting as a support level.
✔️To successfully identify and trade the head and shoulders pattern, consider the following step-by-step approach:
🔹 Look for three distinct tops , namely the left shoulder, head, and right shoulder, which occur after an uptrend.
🔹 Identify the neckline support level , which connects the lowest points of the left and right shoulders.
🔹 Wait for a breakout to occur, confirmed by a candle closing below the neckline.
🔹 Once the breakout is confirmed, place a selling order to capitalize on the bearish reversal signaled by the pattern.
🔹 Implement a stop-loss order above the neckline, ideally positioned at the highest level of the right shoulder, to manage risk effectively.
🔹 Consider using a risk-reward ratio to determine a suitable target for taking profits, ensuring the potential reward justifies the risk taken.
Lets consider the following example below as a step by step to identify the pattern. This is what it would look like in a real scenario:
Step 1: Price is moving on an uptrend and starting to form the head and shoulder peaks
Step 2: We can identify the neckline which we can observe price react as a temporary support which connects the lower peaks. We need to wait for a clear breakout in order to find an entry
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Step 3: Price broke below the neckline and re-tested the neckline so we enter a short position on the re-test with taking profit target the length of the head to neckline
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Step 4: We can see the pattern was correct and it hit our targets
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IEX made bullish head &shoulderIEX made a bullish head &shoulder at the bottom now we are waiting for the breakout.
Buy IEX at 147
Target 153 155.45 158.25 163.25
Sl 138
Bearish head&shoulder in IEX short it Short IEX bearish head&shoulder has been made in this chart sell it out or short it's future.
Sell IEX at below 150
Target 145 138 128
Sl 155
Short it don't need to buy it
btc bull with proofas you can see , if btc form a head and shoulder patter then we will have huge breakout above . but we are using the patter formation to get profit . thats why we taking the position from very dip .
What is Head and Shoulders Pattern?Introducing series topics of trading systems we gonna do on Tradingview and hope readers can learn something from our educational content. Three main systems are the followings:
1)Pattern recognition
2)Trending following
3)Counter trend
Start with pattern recognition, and we will mainly cover two main categories of price patterns: Major Reversal patterns and continuation patterns.
Then introduce today’s educational content: H&S pattern , which is probably the most reliable and best known of all major reversal patterns. Most of the other reversal patterns are just variations of H&S.
Volume Factor: H&S Pattern is relatively easy to recognize but many people ignore the importance of volume: The head should take place on lighter volume than the left shoulder which indicates a diminishing buying power. And volume should also expand on the breaking of the neckline to confirm the pattern.
Price Target: :Also the price target is not guaranteed to be the height of pattern, height may only be a minimum target. Also when we take other factors into consideration such as pivot support area, we need to adjust our price target rather than brainlessly using the height of the pattern as price projection.
Coming back to the topic Bitcoin chart as of today. Bitcoin is also forming the same pattern on a larger time frame.
What do you think, will Bitcoin hold the neckline and rebounce above the right shoulder to form a new bullish trend or will Bitcoin break the neckline with volume confirmed to aim for the next pivot support (also the previous breakout level) around 20,000?
Follow us for more education content on Technical Analysis.
Next Topic Preview: The Inverse H&S pattern
Head and Shoulders the accurate price action patternHead and Shoulders Pattern Tutorial -
Head & Shoulders chart pattern is a price reversal pattern that helps traders identify when a reversal may be underway; this reversal signals the end of an uptrend.
The formation of a H&S pattern resembles a baseline or neckline with three peaks where the middle peak is the highest between the two right and left peaks.
Head and Shoulders patterns are statistically the most accurate chart pattern, almost 85% of the time they reach their projected target.
The formation of a H&S pattern resembles a baseline with three peaks where the middle peak is the highest. The two left and right peak don't have to be at the same price, but the more closer they are to the same level the more stronger the pattern becomes. The pattern completes when price breaks through the neckline.
Stay Tuned, 👍;
