Forex Zone - Forex Forum

Guidelines to trade by Head and Shoulders Bottoms

Discussion started on General Forex Discussion

  • Starter
  • Posts: 9
  • Points: -5
  • Likes Received: 7
  • Reputation: +0/-0
Guidelines  to trade by Head and Shoulders Bottoms




路        A head-and-shoulders bottom is a three-valley chart pattern that resembles a person鈥檚 bust, inverted. The head is below the adjacent shoulders, and it acts as a reversal of the downward price trend.




路        Downward price trend Look for a short-term price trend leading down to the head and shoulders bottom. Three valleys The head and shoulders is a three valley pattern with the middle valley bottoming below the other two. The three valleys and two armpits (peaks between the valleys) should be well defined minor highs and lows.




路        Symmetry The entire pattern has a symmetrical feel to it. The left and right shoulders should have similar distances to the head; both should bottom at or near the same price, and be positioned on either side of the head will improve fx trading signals




路        Neckline, confirmation The neckline is a line drawn across the two armpits. A close above this line confirms the head-and-shoulders as a valid chart pattern. For upsloping necklines, use a close above the right armpit as the confirmation price




路        If the neckline slopes upward from a head-and-shoulders bottom, use a close above the right armpit as confirmation instead of a close above the neckline.


路        How to generate your trading signals


Measure rule Compute the formation height by subtracting the lowest low


reached in the head(s) from the neckline, measured vertically. Add


the result to the breakout price where prices pierce the neckline.


The value is the minimum target price.


Trade inner head Trade the inner HSB. That approach will allow you to get in at a


and shoulders good price. See Chapter 24 on head-and-shoulders bottoms for


specific trading hints.


Stop loss Stocks sometimes decline to the lowest of the right shoulders then


turn around. Look for support areas near the shoulders. Place a


stop-loss order 0.15 below the lowest shoulder or head.


Watch for Buy or add to the position during a throwback. Wait for prices to


throwback finish falling before placing the trade as prices sometimes throw


back and continue moving down.






Linkback: https://www.forex.zone/general-forex-discussion/1/guidelines-to-trade-by-head-and-shoulders-bottoms/370/
#1 - November 04, 2018, 05:10:57 PM
« Last Edit: February 02, 2019, 03:58:17 AM by Admin »

  • Full Member
  • Posts: 177
  • Points: 0
  • Likes Received: 19
  • Reputation: +2/-0

Thank you for the very useful knowledge, next time I can receive information related to HNS (head And Shoulders) again in order to be able to apply it in my daily life to trading, it is very interesting to use the HNS pattern, but currently in technical analysis support and resistant have not mastered all in forms other than HNS, until now I continue to learn about this, hopefully I can use what you have shared.
#2 - February 06, 2019, 11:40:48 AM

  • Hero Member
  • Posts: 1254
  • Points: 102
  • Likes Received: 174
  • Reputation: +70/-0
Guidelines  to trade by Head and Shoulders Bottoms in General Forex Discussion_Head-And-Shoulders-Pattern-On-Weekly-Chart


Again, I found a thread like this that did not include images as an explanation material. I try to illustrate this pattern



#3 - February 06, 2019, 10:52:22 PM

  • Full Member
  • Posts: 151
  • Points: 0
  • Likes Received: 57
  • Reputation: +0/-0
I really like this pattern. this pattern has high accuracy. at a glance this pattern is similar to quasimodo but is simpler with entry when the neckline has been penetrated and corrected slightly. but in other cases this pattern can be unsuccessful under certain market conditions. but whatever it is I use this technique to determine en
#4 - February 06, 2019, 11:09:32 PM

  • Hero Member
  • Posts: 1048
  • Points: 5674
  • Likes Received: 111
  • Reputation: +4/-0
This one pattern is also known as the Bat pattern. Why are bats? Because the shape resembles the shape of a bat when flying. If viewed in terms of analysis, the Head and Shoulders pattern always provides information that there will be a reversal

Head and Shoulders patterns are also one of the many patterns found and used by traders to analyze prices and can be used for short and long term analysis.
#5 - February 06, 2019, 11:49:12 PM

  • Full Member
  • Posts: 234
  • Points: -10
  • Likes Received: 15
  • Reputation: +1/-0
Guidelines  to trade by Head and Shoulders Bottoms





路        A head-and-shoulders bottom is a three-valley chart pattern that resembles a person鈥檚 bust, inverted. The head is below the adjacent shoulders, and it acts as a reversal of the downward price trend.





路        Downward price trend Look for a short-term price trend leading down to the head and shoulders bottom. Three valleys The head and shoulders is a three valley pattern with the middle valley bottoming below the other two. The three valleys and two armpits (peaks between the valleys) should be well defined minor highs and lows.





路        Symmetry The entire pattern has a symmetrical feel to it. The left and right shoulders should have similar distances to the head; both should bottom at or near the same price, and be positioned on either side of the head will improve fx trading signals





路        Neckline, confirmation The neckline is a line drawn across the two armpits. A close above this line confirms the head-and-shoulders as a valid chart pattern. For upsloping necklines, use a close above the right armpit as the confirmation price





路        If the neckline slopes upward from a head-and-shoulders bottom, use a close above the right armpit as confirmation instead of a close above the neckline.



路        How to generate your trading signals



Measure rule Compute the formation height by subtracting the lowest low



reached in the head(s) from the neckline, measured vertically. Add



the result to the breakout price where prices pierce the neckline.



The value is the minimum target price.



Trade inner head Trade the inner HSB. That approach will allow you to get in at a



and shoulders good price. See Chapter 24 on head-and-shoulders bottoms for



specific trading hints.



Stop loss Stocks sometimes decline to the lowest of the right shoulders then



turn around. Look for support areas near the shoulders. Place a



stop-loss order 0.15 below the lowest shoulder or head.



Watch for Buy or add to the position during a throwback. Wait for prices to



throwback finish falling before placing the trade as prices sometimes throw



back and continue moving down.

thanks for the guide!
#6 - February 10, 2019, 07:06:14 AM

  • Hero Member
  • Posts: 1046
  • Points: 4121
  • Likes Received: 47
  • Reputation: +0/-0
head and shoulder in this trade is very unique because by using this pattern then everything we use will end successfully so indeed this pattern is very good and worth replicating
#7 - July 30, 2021, 05:16:00 PM

  • Hero Member
  • Posts: 1055
  • Points: 607
  • Likes Received: 5
  • Reputation: +0/-7
This pattern is usually used by those who are stylish trading against the direction of the trend, and this system also proves to be quite simple because it doesn't use indicators
#8 - August 01, 2021, 03:37:09 AM

  • Hero Member
  • Posts: 3601
  • Points: 0
  • Likes Received: 54
  • Reputation: +5/-7
Head and Shoulder Consists of 3 Components, namely:

After a long bullish trend, the price rose to a peak and then declined to form a trough.

The price rose again to form a second high substantially above the initial peak and declined again.

The price rose for the third time, but only to the first peak level, before dropping once more.


#9 - August 19, 2021, 07:09:12 AM

  • Sr. Member
  • Posts: 471
  • Points: 102
  • Likes Received: 2
  • Reputation: +0/-5
This Head and Shoulder System in my opinion is a system that is easily recognized by its pattern, and also has quite good accuracy
#10 - August 23, 2021, 03:11:59 PM

  • Sr. Member
  • Posts: 361
  • Points: 508
  • Likes Received: 25
  • Reputation: +2/-0
using the head and shoulders technique is very good for sharing But we must know that using the head and shoulders technique must also be accompanied by additional indicators so we must also be able to combine the two things so that both can work well lest we become additional indicators
#11 - August 25, 2021, 08:26:58 AM

  • Sr. Member
  • Posts: 471
  • Points: 102
  • Likes Received: 2
  • Reputation: +0/-5
one trading system that requires good patience because it is long enough to wait for this pattern to be formed and can be utilized
#12 - August 25, 2021, 11:59:32 AM

  • Hero Member
  • Posts: 530
  • Points: 17
  • Likes Received: 21
  • Reputation: +10/-4
head and shoulders are usually used for reversal analysis tools but most are still confused between the use of head and shoulders and others so there are many applications that we have to learn about all of this and we can't do it one by one
#13 - September 09, 2021, 11:42:47 PM

  • Hero Member
  • Posts: 1055
  • Points: 607
  • Likes Received: 5
  • Reputation: +0/-7
a system that aims to look for reversal signals, and this pattern is quite easy to detect, but it takes a lot of patience to be able to wait for this signal or this pattern
#14 - September 10, 2021, 05:11:56 AM

  • Hero Member
  • Posts: 1046
  • Points: 4121
  • Likes Received: 47
  • Reputation: +0/-0
the use of head and shoulders is a very effective pattern in reversal of direction but for the type below it is not a relative but inverse Head and shoulders so the point is the same but the sentence is different
#15 - September 13, 2021, 12:55:38 AM

Members:

0 Members and 1 Guest are viewing this topic.