How to identify head and shoulders patterns?
We’ll use the current example from the Nasdaq or the US markets. We can quite clearly observe that a potential head and shoulders formation is developing. This means that if the price breaks below the neckline, we may see a deeper correction from the April low.
I will go through the rules on how to identify a head and shoulders formation.
We will also cover how to recognize when the pattern is invalid — meaning the market may continue pushing above its all-time high.
Finally, we’ll discuss how we can position ourselves early, before waiting for a break below the neckline for confirmation.
Let’s first go through the rules of identifying head and shoulders with rules stated.
Next, how to recognize when the pattern is invalid, the market continues pushing above its all-time high. The key is in the closing price above the all-time high.
Lastly, how we can position ourselves early, before waiting for a break below the neckline for confirmation.
Of course, we can wait for the break to come as a confirmation, but usually I would like to be a little more active than being passive. So this is just for your reference. It may not be for everyone.
This is where I always get into its micro view by first acknowledging where is the macro is, which we had just discussed. Please refer to the following video:
So what do you think that the market likely or unlikely to fulfill this head and shoulders set-up?
I’d like to hear your thoughts on this.
Micro Nikkei Futures
Ticker: MNQ
Minimum fluctuation:
0.25 index points = $0.50
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
Trading the Micro: cmegroup.com/markets/microsuite.html
cmegroup.com/markets/equities/spot-quoted-futures.html
We’ll use the current example from the Nasdaq or the US markets. We can quite clearly observe that a potential head and shoulders formation is developing. This means that if the price breaks below the neckline, we may see a deeper correction from the April low.
I will go through the rules on how to identify a head and shoulders formation.
We will also cover how to recognize when the pattern is invalid — meaning the market may continue pushing above its all-time high.
Finally, we’ll discuss how we can position ourselves early, before waiting for a break below the neckline for confirmation.
Let’s first go through the rules of identifying head and shoulders with rules stated.
Next, how to recognize when the pattern is invalid, the market continues pushing above its all-time high. The key is in the closing price above the all-time high.
Lastly, how we can position ourselves early, before waiting for a break below the neckline for confirmation.
Of course, we can wait for the break to come as a confirmation, but usually I would like to be a little more active than being passive. So this is just for your reference. It may not be for everyone.
This is where I always get into its micro view by first acknowledging where is the macro is, which we had just discussed. Please refer to the following video:
So what do you think that the market likely or unlikely to fulfill this head and shoulders set-up?
I’d like to hear your thoughts on this.
Micro Nikkei Futures
Ticker: MNQ
Minimum fluctuation:
0.25 index points = $0.50
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/
Trading the Micro: cmegroup.com/markets/microsuite.html
cmegroup.com/markets/equities/spot-quoted-futures.html
konhow@weipedia.com
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.