The Head & Shoulders Pattern

[Raj]

If you don't like staring at charts all day, this is one tecnique I use a lot:

1. Squish your 60min chart.
2. Draw your trendlines.
3. When the market breaks the trendline and takes out or matches the last
supp/res level (point "a" on the charts), wait for a high to form
4. Pull a fib on the swing and place a pending order to buy/sell at the 786 fib.

5. Do this method only on significant trends. If you see consolidation on the
charts (a lot of sideways action) stay out.
6. You can enter at the 618 also based on your risk tolerance, but stops
have to go above/below the highs/lows.
7. Placing trades at the 786 level reduces a lot of risk, and you can find at
least 4-5 of these types of trades a month.
8. Profit levels you can base on your comfort level.

That's it, no major technical expertise needed. Spend 5min a day to scan 30
currencies and you're laughing.

:)

Examples attatched

[pipsqueakr]

thanks Raj... have come to love these patterns

take it from me... # 6 is important... i have been known to skimp not stay out of the wave and get stopped out... only to see it go where we expected.

Be committed to the trade or stay out (imo) :)

Any thoughts on expiration for the 786 pending order as per #4?

[Raj]

Kurt, expiration would be when your trade triggers. Even if it looks like a 382 or 618 bounce, keep the trade in. While H&S pattern is supposed to turn the market around, sometimes its just good for a bounce to grab some pips...get out if you see CF against your trade.

:)

[pipsqueakr]

GJ may be setting up for opportunity.

[pipsqueakr]

GJ didnt take me in but... got taken in to GBP and Kiwi

[Raj]

Nice Kurt!!!

I had some nice pips on gbp/cad - bout 100 pips and cashed out from the 786 fib.

Keep an eye on gbp/nzd also!!

:)

Keep pipping

[Raj]

Gbp/Cad gives another 100 pipper from the RT support!!

:)

[pipsqueakr]

LOL

Congrats

[Raj]

This chart pulled me in as well...gotta love that 786 fib


:)

[Raj]

It took some waiting, but finally gbp/cad hits its mark at the 118 D ext

:)

[Raj]

Cad, cad/chf, usd/zar....all crown trades from the 786 fib...its been a good week for crown profits


:)

[Raj]

crown 786 trade

:)

[Raj]

We'll see how this bull crown plays out...euro not showing good opposites though, so I'm cautiously watching my long.

:)

[Raj]

My RT trade on this pair finally hit its D ext, and I should have shorted it at the extension since there was a convergence with the down 618 fib, but missed the short for some reason....can't catch them all.

:)

[Raj]

nzdjpy had a nice crown showing some profits from the 786 fib...Set and forget trade from a few days ago.

:)

[liadex]

Raj--

A big thanks for this thread. It is giving me confidence to try to trade these. I really like how you can set and forget it!!

:):)

[pipsqueakr]

Guys,

I've been waiting on NZD to come back to the RT since January. What do you say... we never took out the B... so does this count? 61.8, TL...

I have an limit entry @ the 786 but got in on the 1H bearish engulfing.. with a better entry being the low probability BeC on the 5m.

[Raj]

Here's what i have. We are above the TL, so really a daily Cf is needed for any shorting.

:)

[pipsqueakr]

TY and agreed

[pipsqueakr]

well agreement was that if I am looking @ a daily then CF for entry should be on the daily... not sure why my TL is a bit different need to investigate...5m crown hasnt really moved but figure it has to do with tod.

the Big ? is ... as this is the H&S thread.... would you play this @ the 786 blindly... i assume that you do on the 1h irrespective of the TL or... do you need to be in the sell zone br u take this kind of trade.

Appreciate ur thoughts

[Raj]

Sir, maybe I'm losing it, but I don't see a crown...only crown I have happened last November...all I have is a big downswing, and we're testing the 618 of it.

Those 786 crown I only do on the compressed 60min charts...and presently 60min has not done 1&2 yet.

hope thats helps

:)

[Raj]

here's one setting up

:)

[maxtrader]

If you don't like staring at charts all day, this is one tecnique I use a lot:

1. Squish your 60min chart.
2. Draw your trendlines.
3. When the market breaks the trendline and takes out or matches the last
supp/res level (point "a" on the charts), wait for a high to form
4. Pull a fib on the swing and place a pending order to buy/sell at the 786 fib.

5. Do this method only on significant trends. If you see consolidation on the
charts (a lot of sideways action) stay out.
6. You can enter at the 618 also based on your risk tolerance, but stops
have to go above/below the highs/lows.
7. Placing trades at the 786 level reduces a lot of risk, and you can find at
least 4-5 of these types of trades a month.
8. Profit levels you can base on your comfort level.

That's it, no major technical expertise needed. Spend 5min a day to scan 30
currencies and you're laughing.

:)

Examples attatched

Thanks for this great system I am trying to understand the method however, It kind of confuses me your criteria to pick out point a, It seems to me that sometimes is not the last sup/res, It is almost the last but not always, I would apreciate your comment about this.
Kindest Regards

[pipsqueakr]

Appreciate it. thx

[Raj]

Just another example

:)

[pipsqueakr]

LOL... what is TRY u have pairs i've never seen b4 :)

[Raj]

LOL I think its the Turkish Lira or something like that....what do we care...a chart is a chart.

Kurt, hope you took the kiwi TT on the 240, or the ES.

:)

[pipsqueakr]

LOL... i need to know what pair it is so that i can get the chart... LOL

Yes i took the NZD... was a bit early as we discussed... cashed the first lot for a few and have moved the stop on the 2nd to free trade.

Looking for the next 1s.

[pipsqueakr]

how about the CAD/JPY

[Raj]

You have some converging support there!!

[Raj]

Kurt I was examining the daily swings...we're only at a 382....something about this one i don't like. Cad/Jpy that is. Personally I would like to see a CF

:(

[Raj]

Got the CF, but I'm out at the res.

:)

[pipsqueakr]

Nice job sir :)

[Raj]

This one posted two days ago finally comes to our entry, and now giving some nice pips.

:)

[pipsqueakr]

OK this is a good example... i think we may have already discussed but am interested in TP. So you took @ the 786 where is ur TP initially, first solid resistance... it gave good pips but seems to have bounced @ the 618... and now getting some wicks back @ the 786 area.

[Raj]

This my friend is called another buying opportunity...I have re-bought...let's see if it can reach the 382 res again or beyond.

:)

[Raj]

She's not looking good my friend....I have a short on gbp at the 382 res, we have an ES so im in short mode.

:)

[pipsqueakr]

TY for the running commentary didnt see till just now... but i am in long... as long as Greece doesnt default today... i think the cable will go up...


well i hope... lol

good luck

[pipsqueakr]

Agreed with u on the GBP outlook... i've been in since yesterday evening... so may stay in and watch the TL ... but took the G/N pips... thx bro

[Raj]

Yes, the pippage is lovely...made over 100 in the Asian session both up and down, but I've bought yet again gz that is...maybe i'll hold it this time and turn off the monitor LOL

:)

[pipsqueakr]

Way to stay on top of it. How do you monitor so closely while doing other things... do u use alarms? ;)

Looks like... i missed out on some.. but will be happy with the GBP proceeds :) glad i didnt cash those

[Raj]

nice work on the gbp!!

No alarms...just keep forex shopping

:)

[Raj]

Let's see if we get anything bullish here

:)

[Raj]

gbpnzd I have cashed at most lots at the 382 res once again, very little riding still.

:)

[pipsqueakr]

Does this qualify for u sir? The TF not as compressed as you would generally use but...

[pipsqueakr]

JPY Setup?

[pipsqueakr]

After the fact GBP/CAD snoozed on this 1... but that 786 is becoming more and more attractive to me :)

[Raj]

Kurt, jpy 60min has done the 1-2 on the big AB...daily is bullish after the bull crown...and we've been dancing at the 786/86 res all last week...I would only short if we get a break of that TL and 382 combo support

:)

[pipsqueakr]

Can't argue with those facts... :) thx.. have a good 1

[pipsqueakr]

Fundy didnt help JPY short :mad: but now we've scored a point... and

5m ->1h all well OB sto/rsi... so if we break aggressive UTL on the 5m will try to get those back..

[Raj]

Guys, this one has done the 1-2...let's wait for the high and see if she pulls back for a RT

:)