When we go to the literature to study a particular trading pattern that is reliable enough to work with, often times we are presented with the ideal formation which happens to be clean cut and with perfect shape. Unfortunately, the problem is that these perfect shape patterns are actually very rare in comparison to the more natural appearing patterns which are much more abundant and can be found more frequently.
Because these ‘imperfect’ patterns are not well promoted by the technical literature, traders are not trained to look for them and are only accustomed to look for the ideal looking patterns that are very hard to find. Another problem is that traders also tend to believe that those “bad looking” patterns are less reliable in nature, so even when they do spot them, they will often ignore them and just keep looking for their perfect versions.
That is a misconception that couldn’t be any further from the truth. In-fact, we would argue that the ‘offside (that is how we refer to these bad-looking patterns) patterns’ actually provide higher success rate just because they are so over-looked by the trading community. On this weekly episode, we present (in real-time) the case for the Offside Head & Shoulders pattern as it presents itself on the AUD/USD.
We also keep reminding our followers and members that trading patterns, as good as they may be, cannot be trusted as a stand-alone trading technique or method. They should always be coupled with a solid-strong ‘Key-level System’ that will back them up and support their internal conviction. Having these both technical elements supporting each other is a powerful combination that guarantees a high-probability trading opportunities and a higher success rate upon execution.