Help invert head and shoulders?

[Handle123]

Thats right, it can just go sideways

Sounds like a good approach but never take any trading idea for granted, no matter how clever it looks, backtest it first with any enough data, assuming the trading rules are clearly defined.

I had to learn the hard way by losing a ton of money over several years back in the 80/90s, so now I over test methods over min of ten years for day trading, forward and only then go live. Futures so not trade like counterparts of stocks, too many stocks and just so many future instruments, so one has to expect much more controlled environment trading futures for brief times, otherwise there be no arbing or HFTs. It is just like people who do Fibs, that works cause so many people do it, there is no magic to 61.8%, same with chart patterns, those who can apply sound money management trade for decades and those who "play" the market fade away.

And I agree with you, must have clear and precise trading rules and if it can't be coded means rules are not precise enough. I laugh when someone does 100 sample size and wonder why Monday morning they losing.

 

[Emmanuel]

First off, thanks to everyone that replied especially xelite777. I am pretty new to trading and its hard doing this without advice or anyone around that really understands the process.

Too late guys, I entered the trade at the 10800 area. I thought it was an actual breakout because this market has been in a strong uptrend for the past weeks and I thought that was a drop and would continue with the pattern. Obviously, I am sort of regretting entering too early but hope that it is a pullback and it would continue on its high train lol.

 

[Emmanuel]

Since all trades have a 50/50 percentage of working out and only increase or decrease based on your skills after you get dealing with managing the trade, it might be a bad choice for how you trade. But I scalp the ES and other Indexes. When I take long term trades in stocks, I only use weekly bars, so timeframe might have something to consider as well. Bottom line, unless the one who originally asked the question puts in the time, our answers are what works for us. And I am saving money cause I risk in ticks and not hundreds, so I require more precise entries in day trading.

I use a good deal of John Hills books from late 1970 where he speaks of "Thrust" bars and a close beyond a pivot has tested out well for me. Matter of fact, I use close beyond last pivot, so long as not an outside bar, as my identification of trend. We all trade differently, otherwise there wouldn't be any money to be made.

Yeah thats true, I find it easier to trade the futures market because I do not have to hold it overnight most of the time due to the price movements..so are you saying that I should a longer time frame more often as a form of confirmation? Thanks.

 

[Emmanuel]

Thats right, it can just go sideways


I had to learn the hard way by losing a ton of money over several years back in the 80/90s, so now I over test methods over min of ten years for day trading, forward and only then go live. Futures so not trade like counterparts of stocks, too many stocks and just so many future instruments, so one has to expect much more controlled environment trading futures for brief times, otherwise there be no arbing or HFTs. It is just like people who do Fibs, that works cause so many people do it, there is no magic to 61.8%, same with chart patterns, those who can apply sound money management trade for decades and those who "play" the market fade away.

And I agree with you, must have clear and precise trading rules and if it can't be coded means rules are not precise enough. I laugh when someone does 100 sample size and wonder why Monday morning they losing.

I try my best as well to avoid risk as much as possible. They are certain chart patterns that I do not trade because I am sure about them and also because they are not in my trading rule to trade them.

 

[Emmanuel]

Anyway, the markets open in an hr over here so I hope it would retrace back up to its high. I appreciate all the help, I have received so far. Thank you all.

 

[Emmanuel]

Thanks again guys, trade went well. Made a killing and happy. Appreciate the help

 

[xelite777]

Thanks again guys, trade went well. Made a killing and happy. Appreciate the help

Congratulations, this was indeed a real Head and Shoulders formation, glad you made a killing!

 

[murray t turtle]

Anyway, the markets open in an hr over here so I hope it would retrace back up to its high. I appreciate all the help, I have received so far. Thank you all.

%%
Emmanuel;
Bull markets[one year chart] usually do retrace+ exceed monthly hi, more than 50% of the time, monthly charts. But with that index having more sell volume + July + AUG making lower lows, lower HIghs,lower closes, that can show up on any time frame[not retracing monthly HIghs,] for a long, long time.................................................................

 

[jack hershey]

Hello everyone, I did this analysis as I am currently in this trade and I would like any form of help. I have never posted here before and hope people would be of great help. I'll appreciate it. Thank you.

If you wish to trade using the geometry of the markets; you should know that the traditional CW's Head and shoulders is composed of briefer term geometric formations.

I annotated a recently posted chart which does not have your annotations. I used some points that were significant to you as a starting point.

A lot of CW type traders, trade dominant moves after retraces.

A good "hold" for them is the profit segment from the end of the retrace to the inverted head of the formation.

Most traders who can recognize the end of the second dominant of a trend are able to make money trading the next first dominant of a new trend after a trend has failed within the trend's boundaries (FTT formed at the inverted head).

these traders then hold for the next three legs of the new trend to the end of the new trend. I show these three moves as a red bounded trend whose FTT is at the ellipse 1.

This trend failure begins the overlap of the present hold short from ellipse 1 (the FTT) and onto the three moves of the current trend.

 

[AfterLOS]

Thanks again guys, trade went well. Made a killing and happy. Appreciate the help

Now wait for the daily chart Head & Shoulder to trigger and go SHORT to minm. target 9312

If the monthly H&S triggers (right shoulder being formed now) , move to Morocco or fly to Argentina to catch the H&S target.