Bearish Intraday Formations In a Rising Market

Rickshaw Man

Rickshaw Man

One thing I learned about 10 years ago was to look for bullish formations in a rising market. Trade in the direction of the trend. Puts the odds in your favor.

In a falling market look for bearish formations and trade in that direction. Here is a near-perfect Head & Shoulder formation in NQ. It is a 3-minute candle chart. I have seen these fail over and over.


NQ H&S.jpg
 
You can also view those head shoulder things as a consolidation pattern ,

and the market might continue to go up,

or the market might decide to go nowhere.

In summary, if you see such a pattern, the market can
- continue to go up
- reverse direction and go down
- go nowhere
or various combinations of the above.

Only time will tell.
 
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Rickshaw Man said:
One thing I learned about 10 years ago was to look for bullish formations in a rising market. Trade in the direction of the trend. Puts the odds in your favor.

In a falling market look for bearish formations and trade in that direction. Here is a near-perfect Head & Shoulder formation in NQ. It is a 3-minute candle chart. I have seen these fail over and over.


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1. The implication for this pattern is, "break of the neck line suggests downside target equal to the height of the pattern". Well, that objective was satisfied in ~ 15 minutes.... just a short term trading play.

2. H&S more likely to be significant if on the daily chart.

3. Always mention of H&S, but I've found it over the years to be highly unreliable. Yes, every now and then a significant one shows up.... but in general, not.
 
Where ever you look, there's head&shoulder patterns, sure's getting bearish by gum.
Once price begins to fall, here's one to help you keep your hair on.
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Rickshaw Man said:
One thing I learned about 10 years ago was to look for bullish formations in a rising market. Trade in the direction of the trend. Puts the odds in your favor.

In a falling market look for bearish formations and trade in that direction. Here is a near-perfect Head & Shoulder formation in NQ. It is a 3-minute candle chart. I have seen these fail over and over.
More...
Each day ask the good Lord for a signal. Just walk outside and look up above.
It's amazing how often this helps me not to follow a trend and get sucked into dummy trades.
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Zoom your chart out to get more reliable formations. Whether they are reversals or continuations, that neck-line is highly trade-able. I've been thinking that any TA on charts faster that 30 mins are all fakeouts. I've even been considering changing to 1 hr charts for day trades.
 
H&S I've found are better for swings than daytrading. Intraday simple cups, ascending triangles and mean reversion pivots are best imo.
 
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