The head and shoulders pattern is not always the easiest to see or read, but when you train your eyes to spot them, there easy and simple to trade. Also its not just about the pattern itself breaking out its how its done which can also be important. Take the movement for what it really is. As you can see the blue arrow would indicate from the head to the "neckline" traditionally the pattern itself is traded this way and targets would be taken from the equal measure of the top of the head to the neckline to project for targets.... Also as you can see on that right shoulder, we dont quite get a clean break out of the pattern but thats not an issue... Take the last impulse down from the right shoulder and look at the pattern its formed. A bearish flag pattern for those learning... This is also a great pattern to trade as a continuation pattern. its a simple impulse , correction and the last impulse down would of hit traditional targets.
Highlighting the head and shoulders pattern at a vital time in the market as shown on my chart as the mid point zone, This pair is currently ranging, This mid point is of that entire range so to see this reversal pattern form here is what would INCREASE our probabilities the fact we already have sellers waiting at this area.
Highlighting the head and shoulders pattern at a vital time in the market as shown on my chart as the mid point zone, This pair is currently ranging, This mid point is of that entire range so to see this reversal pattern form here is what would INCREASE our probabilities the fact we already have sellers waiting at this area.