Is it a qualified Head and Shoulder Pattern ? Please comment.
Daily chart:
I suppose you could call it that, but any significance in my opinion is overruled by the obvious support area price is now at. I don’t trade H&S patterns myself, so I can’t claim to be expert in them, but I think you may have missed the break of the right shoulder for a short entry anyway?
Think the right shoulder didn’t go far enough for it to be a true H&S
Here I have a video about H&S patterns.
It doesn’t really qualify as H&S because. its a topping pattern and your chart shows it has formed in the middle of the range.
However you could be just looking at the right shoulder of a much bigger H&S pattern. Or you can just look at it as a huge box range and the the break of your support level could take you down by the height of it anyways.
Thanks. It was very much helpful
I agree with AuthenticFX that the major horizontal support line is dominant and that you missed your short entry opportunity. I also think you missed one or two other bearish chart patterns before this one. You could call it a H&S, but I would not add my short at support. This is just my opinion.
a H&S could have a horizontal support … nothing wrong in that …of course downward slope would have been the best here. … but to me this looks valid.
…[B]you missed your short entry opportunity.[/B]
how come ? neckline is not broken here …how come I miss it ?
You are right, Godzilla… you would not have missed it: wait until the neckline has been broken…
http://www.dailyfx.com/forex_forum/tradera-s-tool-box/612736-head-shoulders-pattern.html
When I trade H/S I place my shorts when the ascending support line is broken. I don’t know which currency pair this is and without further analysis this comes down to a guess, but in this case to me the support line dominates the H&S pattern.
This is obvious example of H&S pattern. But I suppose the sharper are angles the more is a chance to hit your bearish conjecture. In your case it’s a bit stretched in horizontal but to make it more exactly you have to analyse timeframe you get this pattern on. The more is timeframe, the stronger is pattern
Head and shoulder pattern should be best traded after 1)…the left shoulder had formed,confirmed by the head . I would prefer to place my trade as the head is forming, creating the"cup" bottom pattern . You will get a smaller stop loss, just above the head, while your first take profit would be the neckline