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!!!
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 ?
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.
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.
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.
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.
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