Quote from gmst:
Sounds plausible, but frankly improbable. Let me explain why i think so: Quants care about arbitrage relationships between index and stocks, pairs among stocks, baskets of stocks, quants program level II order book - with the aim of making intra-day profits in a low volatile manner. I am very sceptical of the idea that quants program H&S patterns and that too on intra-day data.
Imo, H&S patterns do work in markets on longer time frame, because of human large position traders (private individuals, banks, funds etc), who look at the price action over a longer time period and can take and keep positions worth 1000 contracts over multiple days/months. I think this kind of money flow and the traditional knowledge of patterns is the reason behind the patterns working on a longer time frame.
But I could be wrong.
