In hindsight, it is easy to spot chart patterns. However, these setups can still be traded effectively if you recognize them in real time while monitoring your pairs. Another approach is to build a system around head and shoulders patterns and set price alerts to help capture these moves.
In this example, I identified a head and shoulders pattern on the 4H timeframe, then dropped to a lower timeframe to execute the trade based on predefined system rules.
Example system rules:
1. Wait for a candle close below the neckline.
2. Enter on the open of the next candle.
3. Place the stop loss above the high of the candle that closed below the right shoulder neckline.
4. For take profit, either:
* Use a fixed target such as 1.5R or 2R, or
* Hold the trade until your system confirms an exit, such as a break in market structure against the trend.
In this example, I identified a head and shoulders pattern on the 4H timeframe, then dropped to a lower timeframe to execute the trade based on predefined system rules.
Example system rules:
1. Wait for a candle close below the neckline.
2. Enter on the open of the next candle.
3. Place the stop loss above the high of the candle that closed below the right shoulder neckline.
4. For take profit, either:
* Use a fixed target such as 1.5R or 2R, or
* Hold the trade until your system confirms an exit, such as a break in market structure against the trend.
Pernyataan Penyangkalan
Informasi dan publikasi ini tidak dimaksudkan, dan bukan merupakan, saran atau rekomendasi keuangan, investasi, trading, atau jenis lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Ketentuan Penggunaan.
Pernyataan Penyangkalan
Informasi dan publikasi ini tidak dimaksudkan, dan bukan merupakan, saran atau rekomendasi keuangan, investasi, trading, atau jenis lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Ketentuan Penggunaan.