Are you always trying to find the most accurate head and shoulders chart pattern or always looking for the correct way on how to draw the proper resistane line/ support line? Let me tell you a secret: the market has a lot of Market Makers or Instutional Traders who set up traps on the version of chart pattern that you are reading with, they know retail traders like reading chart pattern and draw trendlines, and they will force you to close at a price that that you do not want to (hunt for your stop-loss order), thus generally, you need to give extra buffer that the market might not be reacting the way that you think the market should.
Generally speaking, if you are looking for chart pattern to trade, the most consistent, and hence, the most profitable chart pattern is the Butterfly Harmonic Pattern or called Gartley 222 Pattern or ABCD Pattern as well.
There is one simple reason why the ABCD Pattern works better than the other chart pattern. whatever it is Double Top Pattern, Double/ Triple Bottom Pattern, U Shape Bottom, Cup and Handle, Ascending Triange, you name it.
The simple reason is there is a Mathmatics or golden ration guiding how you draw the trendlines in the Butterfly Harmonic Pattern. Yes each trendline/ Price Pattern is required to match the 0.236 0.383 or 0.628 ratio of previous movement, hence it is unlike Hands and Shoulder or Decending Triangle that you can connect whatever Bottoms you feel like as the market support line.
and yes, there are some Simple Math which works behind the market. so stop draw non-math backed resistant and support line that gives ambiguous signal, and follow us to learn how simple Math is workling implicitly in side the market so that you can consistently win from the market at www.gannexplained.com
There are some of the real time wd gann math predictions that we have done in the last quarter. the red line being the forecast we suggested, the green section is the real time market reaction after the forecast was posted.
SEND an email with subject "Math Trading FXT" to [emailprotected] to learn how this market actaully implicitly reacts to the market (it is not golden ratio & fibonacci, wd gann mathematics sequences not every trader already knew!)
which every trader already knows!)
Khit Wong and all members of Gann Explained LLC are NOT financial advisors, and nothing they say is meant to be a recommendation to buy or sell any financial instrument. All information is strictly educational and/or opinion. By reading this, you agree to all of the following: You understand this to be an expression of opinions and not professional advice. Any opinions, news, research, analysis, prices, or other information contained on this website is provided as general market commentary and education and does not constitute advice. The brand name of Gann Explained LLC will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information. You are solely responsible for the use of any content and hold Khit Wong, Gann Explained LLC all members harmless in any event or claim. FTC DISCLOSURE: Any income claims shared by myself, students, friends, or clients are understood to be true and accurate but are not verified in any way. Always do your own due diligence and use your own judgment when making buying decisions and investments in your business.
FAQs
The head and shoulders patterns are statistically the most accurate of the price action patterns, reaching their projected target almost 85% of the time. The regular head and shoulders pattern is defined by two swing highs (the shoulders) with a higher high (the head) between them.
Which stock pattern has the highest accuracy? ›
Head and Shoulders Pattern: The head and shoulders pattern is considered one of the most reliable chart patterns and is used to identify possible trend reversals.
Which chart pattern is best in forex? ›
Inverse head and shoulder chart pattern
This chart pattern helps traders predict how much the price of a currency pair is going to rise in the future and in what intervals. This leads the traders into making entry decisions in the market to maximise their profits.
How do you take profit in the head and shoulders pattern? ›
Take Your Profit – in the head and shoulders pattern, the profit target is the price difference between the head and the low point of each shoulder; this difference must be then subtracted from the breakout level, providing a price target (the situation is reversed for the inversed pattern, with the difference being ...
What is the simplest most profitable trading strategy? ›
One of the simplest and most widely known fundamental strategies is value investing. This strategy involves identifying undervalued assets based on their intrinsic value and holding onto them until the market recognizes their true worth.
What type of trading makes the most money the fastest? ›
Day trading offers rapid profits but demands quick decision-making, while position trading requires patience for long-term gains. Forex and cryptocurrency trading provide access to global markets, while options and algorithmic trading introduce sophisticated strategies.
When to enter head and shoulders pattern? ›
Entry Method #1
The first way to enter a head and shoulders break is to sell as soon as the candle closes below support. For example, because we're analyzing the GBPJPY on the daily time frame, we'd wait for a daily close below the neckline. That would be our signal to go short (sell).
How accurate are head and shoulders patterns? ›
The head and shoulders trading pattern is generally considered to be a reliable technical indicator of a potential trend reversal, but its accuracy will depend on the individual market and the circ*mstances.
What time frame is best for chart patterns? ›
Several traders claim that the 5-minute and 15-minute time frames are the most preferred chart time frames for intraday trading. Many software also provides system-based 1-minute and 30-minute charts. However, they are either too slow or too volatile.
What chart do most day traders use? ›
A day trader could trade off of 15-minute charts, use 60-minute charts to define the primary trend and a five-minute chart (or even a tick chart) to define the short-term trend.
Candlestick charts are perhaps the most widely used among active traders. In some ways, candlestick charts blend the benefits of line and bar charts as they convey both time and impact value. Each candlestick represents a specific timeframe and displays opening, closing, high, and low prices.
How do you master a forex chart pattern? ›
Here are some tips for making the most out of trading forex chart patterns:
- Switch to Line Charts. ...
- Confirm Chart Pattern Signals with Candlestick Patterns. ...
- Combine Chart Patterns with Technical Indicators. ...
- Trading Chart Patterns using Conditional Orders.
The Head and Shoulders pattern occurs when the price of security starts rising, marking the bullish trend, and reaches a new high level. However, the rise in prices is short-lived and the prices start to drop.
What is the target price of the head and shoulders pattern? ›
The target of a Head & Shoulders pattern is typically determined by measuring the vertical distance from the pattern's head to the neckline and then subtracting this distance from the neckline's breakout point. This target represents the potential price decline after the pattern completes and the trend reversal occurs.
What is the triple top pattern? ›
Triple Top Pattern is a bearish reversal pattern that forms after an extended uptrend. It signifies a potential shift in market sentiment from bullish to bearish. The pattern consists of three consecutive peaks at approximately the same price level, with two minor pullbacks in between.
What is the most successful day trading pattern? ›
The best chart patterns for day trading include the triangle, flag, pennant, wedge, and bullish hammer chart patterns.
What is the most popular trading pattern? ›
The head and shoulders chart pattern and the triangle chart pattern are two of the most common patterns for forex traders. They occur more regularly than other patterns and provide a simple base to direct further analysis and decision-making. Try a demo account to practise your chart pattern recognition.
Which trading strategy has highest probability of success? ›
One strategy that is quite popular among experienced options traders is known as the butterfly spread. This strategy allows a trader to enter into a trade with a high probability of profit, high-profit potential, and limited risk.
What is the easiest pattern to trade? ›
The easiest to learn patterns are the falling wedge, rising wedge, bull flag breakout, and cup and handles. The cool thing about trading patterns is that they happen repeatedly, and you can fall in love with or even marry them.
