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Invertedheadandshoulders

Inverted Head and Shoulders Pattern: A Comprehensive GuideThe inverted head and shoulders pattern is a popular and reliable technical chart pattern used by intermediate and advanced traders to identify potential reversals in market trends. This guide will provide a step-by-step approach to trading this pattern, covering key concepts and actionable strategies. Understanding the Inverted Head and Shoulders Pattern The inverted head and shoulders pattern is a bullish reversal pattern that occurs at the end of a downtrend. It consists of three troughs, with the middle trough (head) being the lowest and the two adjacent troughs (shoulders) being higher but roughly equal in depth. The pattern is completed when the price breaks above the neckline, a resistance level connecting the two peaks formed between the troughs. Identifying the Pattern To identify the inverted head and shoulders pattern, follow these steps: a. Volume Analysis - Look for decreasing volume during the formation of the left shoulder and the head - Volume should increase during the formation of the right shoulder - Expect a significant increase in volume during the breakout above the neckline b. Trendlines and Support Levels - Draw a trendline connecting the peaks between the left and right shoulders to define the neckline - Establish support levels by identifying previous swing lows and areas of price congestion Key Rules for Trading the Pattern - The pattern is only valid when it forms at the end of a downtrend - The pattern should be symmetrical, with the shoulders roughly equal in depth - Wait for a breakout above the neckline before entering a trade - The neckline should act as support after the breakout Entry Strategies Choose between a conservative or aggressive approach based on your risk tolerance: a. Conservative Approach - Enter the trade after a confirmed breakout above the neckline - Wait for a retest of the neckline as support before entering b. Aggressive Approach - Enter the trade before the breakout, as the right shoulder is forming - Use additional technical indicators, such as RSI or MACD, to support your entry decision Setting Stop Loss and Take Profit Levels - Set your stop loss below the right shoulder or the head, depending on your risk tolerance - Determine your take profit level by measuring the distance from the head to the neckline and projecting that distance upwards from the breakout point Common Pitfalls and How to Avoid Them - Entering the trade too early, before the pattern is fully formed - Failing to wait for a breakout confirmation above the neckline - Ignoring volume analysis, which can provide important clues about the pattern's strength Real-Life Examples and Case Studies - Study real-life examples of inverted head and shoulders patterns such as the one attached to this idea or others I have posted previously to reinforce your understanding and develop your pattern recognition skills. - Analyze different market conditions and timeframes to gain insight into how the pattern performs under various circumstances. The inverted head and shoulders pattern is a powerful tool for identifying potential market reversals at troughs. By understanding the pattern's structure, following the key trading rules, and adopting appropriate entry strategies, intermediate and advanced traders can capitalize on this reliable chart pattern.
Education
by bitdoctor
Inverted Head & Shoulders with Golden CrossIt's not a coincidence that Elon was on twitter having a who wore a golden cross better with the pope. This idea is using the 200D and 50D golden cross and an Inverted Head & Shoulders and a price target of 300. Be Warned. TSLA has faked out many large structures and major MA crosses to trap both Bulls and Bears. I bought weekly OTM puts on TSLA before close on Friday but I will stop out and enter long should this structure retest. It really depends how the Biden Admin handles this most recent surprise OPEC+ supply cut just as they need to restock SPR. This could be the moment the FED has to pivot and Powell turns back on the printer to pay for it or someone is getting their hand slapped.
NASDAQ:TSLA
by SPYvsGME
1
DGBUSD: Inverted Head and Shoulders Above POCDigibyte on many charts is breaking out of a falling wedge while showing us a 3 Line Strike on the monthly and on these charts the macro move you'd expect would take s between 12 and 20 cents, with that in mind i now look on the more liquid Bybit Chart and can see that 12 cents would be the 1.618 Extension and that it is currently trading above the POC after forming an Inverted Head and Shoulders pattern. If we breakout i would target the 0.886, then i would target the 1.618 for profit taking.
Long
by RizeSenpai
BTCUSDT | TFW Wave Analysis | Inverted H&S Retesting Neckline?The current uptrend wave is potentially a leading diagonal with a valid inverted head & shoulders reversal pattern breakout - now with a DOJI candlestick this week, the price could retrace to the neckline level 25k, watchout for a false breakout then most likely to breakdown - SHORT ENTRY to the neckline level and EMA200 week -20+% downside (A valid inverted H&S consists of a strong downtrend with at least twice length of the head & shoulders pattern and massive volume breakout)
Short
by dukeposh
1
BOOK of SAMUEL: DAVID V GOLIATHWow! This is a first for me, in such a large timeframe. Looking at both patterns forming. The larger head & shoulders pattern may take precedence, as it is generally considered to be a more significant pattern. If the H&S pattern is confirmed, it would suggest that the uptrend is ending and that a downtrend may be beginning. However, if the Inverted H&S pattern is also confirmed, it could indicate that the trend is changing and that an uptrend is beginning.
CME_MINI:ES1!
by theswiftninja
NVDA: Incredibly Bullish!• NVDA is very bullish, and it seems it wants to hit its next resistance at $289; • As seen in the weekly chart, there’s no top sign nor weakness signs indicating that it could correct from here; • What’s more, NVDA triggered an IH&S chart pattern in January, and it did an upwards breakout from the Descending Channel (purple lines) it was trapped inside; • Could NVDA correct from here? Yes, and a pullback to its 21 ema would be acceptable, as the last time we hit it was a couple of months ago. However, in order for a pullback to materialize, we must see a reversal pattern in the daily chart: • In the daily chart we see nothing but a series of higher highs/lows, above the 21 ema – An incredibly strong bull trend; • We would need to see a clear bearish structure, like a lower high/low, a top/reversal chart pattern like a Double Top, H&S, etc. So far, there isn’t any meaningful bearish sign; • In this scenario, NVDA could trigger a sharper correction, and maybe even fill the gap at $210 (which is very close to the 21 ema in the weekly chart, by the way); • However, even if NVDA does a correction of this magnitude, it wouldn’t ruin the bull trend seen in the weekly chart, only in the daily chart; • I’ll keep you updated on this. Remember to follow me to keep in touch with my daily analysis!
NASDAQ:NVDA
by Nathan_The_Finance_Hydra
6
The hilarious tale of CardanoKnock, knock! Who's there? Cardano. Cardano who? Cardano, the financial asset that's creating an inverted head and shoulders pattern. It's currently struggling to break 42 cents, but if it does, it could quickly approach 60 cents! Wow, that's impressive. But why is it called Cardano? Well, apparently the creator of the cryptocurrency was a big fan of the Italian mathematician Gerolamo Cardano. And just like Cardano's mathematical formulas, this asset's price movements are pretty complex too! Haha, sounds like a real brain-teaser. You got that right. But here's the thing - if Cardano can break 42 cents, it'll be smooth sailing all the way to 60 cents. And that just happens to be where a previous area of resistance was back in August of 2022. So, Cardano is not just a financial asset, it's also a history buff? You could say that. But hey, who cares about the past when you've got such a bright future ahead? Once Cardano hits 60 cents, it'll be party time for everyone who invested in it. Well, count me in! I'm ready to ride this Cardano train all the way to the bank. Just don't forget to sell when it's time to cash out. Otherwise, you might end up with a bunch of worthless digital coins and a broken heart. Note: It's best to wait for the 42 cent area to break before getting heavily involved. A nice bounce here, but we're not out of the woods yet.
Long
by bitdoctor
BDMS | Inverted Head & Shoulders | Entry @ Breakout SetupPrice Action & Chart Pattern Short-term Trading > Inverted Head & Shoulders > Entry @ Breakout Setup > Target at previous high > Stoploss @ right shoulder Indicator: > Banker Smart Money & Banker Chip Volume Support at significant level > BBD bullish divergence crossed above baseline > Banker Fundflow uptrend but not overbought > KDJ ribbon on uptrend above 70 Trading with affordable risk ratio 2:1 for short term trade Always respect your stoploss
SET:BDMSLong
by dukeposh
Cardano at a critical pointI gave a pretty vague outlook on Cardano the other day so I figure I should probably fess up a bit and let you all know exactly how I feel about it. Right now, it looks like we're in an inverted head and shoulder pattern. It looks like it wants to explode out of here and o straight for the target which is $0.75 but not so fast. Lets discuss a few things here. First, do you actually know how to trade a head and shoulders pattern? Pattern trading can be pretty decent as long as you do it right. Ideally, we'll break out of the current pattern and do a nice solid retest of the neckline. Your stop loss should be the low of the right shoulder and your target should be 100% of the size of the head to the neckline. That puts us at right below 75 cents. To compare, ADA is trading at 40 cents now. That's a pretty good reward, but what is the risk? Currently a 13% risk. That's not insignificant. Play your cards right and you'll be okay but don't do anything dumb. Wait for a breakout and get a retest of this level we're at now (around 40 cents) and you'll be ok. Just keep that stop loss to make sure you survive another day.
Long
by bitdoctor
4
ETH [SHORT TERM TRADE]ETH has given a long rally since a week, now it's time for a pullback and then again a rally. So at daily timeframe it is showing support at 200 EMA and golden zone is at 1449. - If price closed below 1500 at 1 hour time fame then take a short entry till 1500. - If price closed above the 1553 at one hour time frame then take a long entry till, easily you can take it till 1580 and second target is 1619. Note - You can still go long from 1500 and go on till same levels. Manage you risk and follow 1:2 Risk reward ratio.
BITSTAMP:ETHUSDLong
by ps059042