HI All my fist time online my name is Brandon And looking
Forward To CONNECT with MANY new TRADERS
i KNOW That it has not been easy Always willing
to learn and thanks to everyone on their support :
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I must admit that although I have known for a long time what head-and-shoulders are, I never look for them. So I never see them.
I think maybe babypips deserves a thread where H&S are highlighted.
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Hi Tommor, Not sure if this will help in any way, but H&R are normally traded on S&R lines, where a market is at a supply & demand zones known as a sideways market (ranging market). They are never used on trending markets. H&R is a reversal pattern to identify when and were to enter your trade. So when you have a Demand zone, people are looking to buy (going long), allowing price to rise, when it hits a price or area that price stopped at, then that is your supply area/ resistance zone where people will sell ( shorting the market) allowing price to fall. As you will see from the picture I posted, the market was in a bullish trend it hit area of resistance ( supply zone), it then fell to a level and reversed again creating support ( demand zone). price then bounced back up to the supply but breaking the previous high ( known as the head), then down to support again, (the market should stop around the same price) at this point you will have a line connecting the two low points ( Neck line), when market reverses back to the supply again it should also stop at the same price area as the first high ( not the second as this is the head or high price), now you should have a line connecting peak 1 and peak 3 creating your ranging market zone (shoulders). You need to extended your support line ( demand zone) as this is also your support line for the market. when the price has started a bearing trend down after the 3rd it of your supply zone and it breaks your support level you should enter for a short position after a retest of your support lever to make sure it has become a resistance. Some traders will enter after the 3rd touch of the resistance ( supply/ shoulder) I think this is also known as a breakout pattern but not sure on that. hope this helps.
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