Hello everyone:
In this quick educational video, I will go over how I utilize Head and Shoulder Pattern/structure in the market.
Specifically, how I identify reversal price action from a Head and Shoulder Pattern.
It's important to understand that Head and Shoulder Is a reversal structure in the market.
When we identify these patterns, they are usually at the top or the bottom of the over price action,
and its signaling a bullish or a bearish trend may be exhausted, and a reversal trend may begin.
Typical H and S will have a bullish move up, followed by a continuation correction (Left Shoulder), and move up again.
At the peak (Head) , instead of a continuation to push up further, we then see a reversal bearish push down.
Then, we see price form that bearish continuation correction (Right Shoulder) now, looking to push the price back lower.
Just like any other price action structures/patterns that I have been talking about, these structures/patterns will appear in any time frames, any market.
So it's important to understand multi-time frame analysis and top down approach.
A 5 min H and S pattern may not be that strong reversal to give you 100 plus pips because the HTF is showing us different bias.
From my experiences, a H and S pattern works best when we spot on the LTF price action. When we have a clear bias on the HTF for a potential bearish reversal, we go down to the LTF to look for confirmation and entry.
Remember a H and S pattern will not always be “textbook” perfect like you will learn from various courses/lessons. The market itself is not perfect, so remember that when you analyze the market.
Last but not least, and inverse H and S is just a mirror of a typical H and S. It's just now you are spotting them at the bottom of the overall price action, and rather to reverse into a bullish trend.
As always, any questions, comments or feedback please let me know.
Thank you
Jojo
In this quick educational video, I will go over how I utilize Head and Shoulder Pattern/structure in the market.
Specifically, how I identify reversal price action from a Head and Shoulder Pattern.
It's important to understand that Head and Shoulder Is a reversal structure in the market.
When we identify these patterns, they are usually at the top or the bottom of the over price action,
and its signaling a bullish or a bearish trend may be exhausted, and a reversal trend may begin.
Typical H and S will have a bullish move up, followed by a continuation correction (Left Shoulder), and move up again.
At the peak (Head) , instead of a continuation to push up further, we then see a reversal bearish push down.
Then, we see price form that bearish continuation correction (Right Shoulder) now, looking to push the price back lower.
Just like any other price action structures/patterns that I have been talking about, these structures/patterns will appear in any time frames, any market.
So it's important to understand multi-time frame analysis and top down approach.
A 5 min H and S pattern may not be that strong reversal to give you 100 plus pips because the HTF is showing us different bias.
From my experiences, a H and S pattern works best when we spot on the LTF price action. When we have a clear bias on the HTF for a potential bearish reversal, we go down to the LTF to look for confirmation and entry.
Remember a H and S pattern will not always be “textbook” perfect like you will learn from various courses/lessons. The market itself is not perfect, so remember that when you analyze the market.
Last but not least, and inverse H and S is just a mirror of a typical H and S. It's just now you are spotting them at the bottom of the overall price action, and rather to reverse into a bullish trend.
As always, any questions, comments or feedback please let me know.
Thank you
Jojo
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