Head & shoulders ftse100

[gkareer]

sorry this is correct chart

 

[Bigbusiness]

Nice chart. A couple of questions:-

Were you looking for the 12 point target or do you look at this pattern as a start of a new trend?

Where do you place your stop?

 

[gkareer]

I placed my stop above the shoulder at 4140, just been stopped out.
Yes i did think it was th start of new down trend.
My moving avergaes also gave a sell signal & 14 CCI also was heading south through 0, on my 5min chart!!
Lost 8 points could of made 20-40!!!

thanks for looking at my charts bigbusiness

cheers

sonny

 

[gkareer]

I'm new to trading so just learning a thing or two.

Do you think i put my stop to close, do u think it would be better placed just about Head at 4146.

I just think if i've been stopped out too soon, shall see

sonny

 

[bonsai]

hmm
not my favourite patterm.
I suspect more of them abort than succeed and
that is why they stand out so well
when they do succeed , if you see what I mean.

I guess the problem might be they only work at tops and we
havent topped out yet ?
so when the pattern aborts you should stop and reverse ?

 

[bonsai]

you didnt say where you went short.

if the pattern is too succeed it must break the neckline.
so if it breaks back above it , it has failed ?
should your stop not be at the neckline or 1 or 2 pts above it ?

I have drawn 2 lines on your chart but I think the horizontal one
is where I might have put my stop.

anyone else got any thoughts ?

 

[Bigbusiness]

I prefer the head & shoulders to form over a longer period of time and to have a higher target price. They are supposed to be quite reliable and the stop is small enough if there is a chance of a reversal.

Good luck with the next one sonny.

 

[Dr Mike]

Hi Bonsai

Several T/A authorities (incl TBS) seem to favour a stop level above the right shoulder, alas it doesn't seem to make much difference for me as mine invariably fail.

 

[bonsai]

havent traded Head and shoulders patterns since ftse went
over to sets.
they were more reliable under the old jobber system. imo

 

[Bigbusiness]

I have seen a few stats. about head and shoulders but it would be interesting to know how accurate they are on a 1min chart. They seem to meet their target from the top of the head reasonably often but how often do they signal the end of a trend?

Does the inverse h&s work better? I will have a look at some charts when I get some time.