Would you like to inspect the original subtitles? These are the user uploaded subtitles that are being translated:
1
00:00:02,560 --> 00:00:07,300
In this video, I'll take a look at the head and shoulders pattern, the head and shoulders pattern
2
00:00:07,300 --> 00:00:10,200
is one that is recognized by most traders.
3
00:00:10,210 --> 00:00:12,160
It's very commonly traded.
4
00:00:12,170 --> 00:00:18,700
So, of course, you want to know about it, a head and shoulders and an inverse head and shoulders,
5
00:00:18,760 --> 00:00:21,160
because there's two directions that you can trade in.
6
00:00:22,480 --> 00:00:27,370
Look, something like this in the case of a head and shoulders and an uptrend.
7
00:00:28,430 --> 00:00:34,220
So what happens is you get a continuation of the uptrend, you get the pullback like you get, you know,
8
00:00:34,310 --> 00:00:38,030
in any uptrend, and then you continue to go higher, you make a higher high.
9
00:00:38,040 --> 00:00:39,710
That's part of an uptrend as well.
10
00:00:40,340 --> 00:00:45,900
You pull back a bit and then this hump over here doesn't make a new high.
11
00:00:45,920 --> 00:00:47,210
So this is a shoulder.
12
00:00:47,270 --> 00:00:48,200
That's a shoulder.
13
00:00:48,200 --> 00:00:49,160
And that's your head.
14
00:00:49,500 --> 00:00:50,450
Hence the name.
15
00:00:51,710 --> 00:00:58,010
You can draw the line from these little dips between the head and shoulders, between each shoulder
16
00:00:58,010 --> 00:01:02,300
and head, I should probably phrase it out and that's your next line.
17
00:01:02,300 --> 00:01:07,940
And your neck line is a signal to either buy or sell in this case.
18
00:01:07,950 --> 00:01:09,080
So in a head and shoulders.
19
00:01:10,100 --> 00:01:10,830
So think about it.
20
00:01:10,850 --> 00:01:14,000
What's happened is we've rallied, we continued.
21
00:01:14,000 --> 00:01:16,400
And then this time we just ran out of momentum.
22
00:01:17,680 --> 00:01:22,570
The great thing about head and shoulders, it's kind of built in measuring stick here, where the top
23
00:01:22,570 --> 00:01:29,940
of the head to the neck line, if you measure that and let's just say it's two hundred dollars, well,
24
00:01:29,940 --> 00:01:30,760
I'll break down.
25
00:01:30,970 --> 00:01:34,090
And the neckline, you're aiming for at least 200 dollars.
26
00:01:34,460 --> 00:01:41,050
A lot of times the system gets put on the other side of the shoulder, and quite often that automatically
27
00:01:41,050 --> 00:01:47,890
gives you at least a positive risk reward ratio, sometimes two, sometimes three to one automatically.
28
00:01:48,400 --> 00:01:53,200
Now, the thing that you'll notice over time is a lot of times these patterns, especially in currencies,
29
00:01:53,200 --> 00:01:58,860
for whatever reason, they'll fulfill that move, grind for a bit and continue going even further.
30
00:01:59,620 --> 00:02:01,840
So that's the head and shoulders.
31
00:02:01,840 --> 00:02:07,360
The inverse head and shoulders, as I'm sure you have guessed, is simply the bullish version of this.
32
00:02:07,780 --> 00:02:10,390
In a downtrend, you'll see something like that.
33
00:02:10,390 --> 00:02:14,140
You've got your neck line, you've got the measurement, you got your target.
34
00:02:14,710 --> 00:02:15,580
Should be noted.
35
00:02:15,580 --> 00:02:16,840
It can be angled like this.
36
00:02:16,840 --> 00:02:21,850
It does not have to be straight up and down 90 degrees, you know, so sometimes, you know, they'll
37
00:02:21,850 --> 00:02:24,580
actually look more like this.
38
00:02:26,120 --> 00:02:27,920
You know, and then you draw your line like that.
39
00:02:29,060 --> 00:02:31,980
Same thing with the inverted head and shoulder.
40
00:02:32,000 --> 00:02:35,150
So let's take a look at these in the wild and you can see exactly.
41
00:02:37,070 --> 00:02:38,480
What I'm looking for here.
42
00:02:41,510 --> 00:02:45,920
And there's your neckline so you can see that the pattern does play out right.
43
00:02:46,820 --> 00:02:47,510
So.
44
00:02:48,490 --> 00:02:53,760
Here is your next line and here is the heighth.
45
00:02:56,360 --> 00:03:05,390
The head to neck line, and you'll notice that we clearly hit the target without too many issues and
46
00:03:05,390 --> 00:03:11,570
in fact hit that area a couple of times, not a huge surprise because a lot of times these areas get
47
00:03:11,570 --> 00:03:13,130
visited more than once.
48
00:03:14,890 --> 00:03:19,410
And finally, over here in Tron, this is a four hour chart, you can see that we had been rallying,
49
00:03:19,420 --> 00:03:23,800
we got a nice rally there, a bigger rally, and then kind of ran out of steam.
50
00:03:24,690 --> 00:03:26,880
Let's go ahead and draw our neckline.
51
00:03:29,490 --> 00:03:32,370
You can see that you could have put your stop loss here.
52
00:03:33,390 --> 00:03:41,850
Your measured move was six cents, so from twenty one, you're looking for a move down to 15 and you
53
00:03:41,850 --> 00:03:46,020
did in fact get it wasn't right away, but it did happen.
54
00:03:46,020 --> 00:03:48,200
Never threatened your stop loss.
55
00:03:49,080 --> 00:03:55,710
You will find that head and shoulders patterns are followed by quite a few traders, mainly because
56
00:03:55,710 --> 00:03:56,580
they're obvious.
57
00:03:56,580 --> 00:03:58,500
They catch a lot of people's attention.
58
00:03:59,010 --> 00:04:06,000
Higher timeframes are much more reliable than shorter time frames, as is the case with all technical
59
00:04:06,000 --> 00:04:07,530
analysis patterns.
60
00:04:10,540 --> 00:04:12,490
Let's take a look at Magdy.
61
00:04:15,130 --> 00:04:20,590
And you can see that we had a crossover at an extremely high level right here at the top, and then
62
00:04:20,590 --> 00:04:23,440
by the time we get down here, we were well below the zero.
63
00:04:24,430 --> 00:04:29,500
So that, of course, would have caught the attention of somebody who was a Mac de trader.
64
00:04:35,940 --> 00:04:36,720
The 20.
65
00:04:37,890 --> 00:04:46,290
E-mailing and a four hour chart you can see slip nicely, crashed through it, found resistant and then
66
00:04:46,290 --> 00:04:47,020
broke down.
67
00:04:47,310 --> 00:04:50,760
That would have been a signal for somebody using M.A.
68
00:04:51,800 --> 00:04:53,000
There are.
69
00:04:54,820 --> 00:04:59,680
Quite a few different ways to do this, but you'll notice that the pattern, the great thing about this
70
00:04:59,680 --> 00:05:04,450
pattern is that when you step into it and you get the breakdown, for example, in this case, you knew
71
00:05:04,450 --> 00:05:06,630
exactly what you were looking for to begin with.
72
00:05:06,640 --> 00:05:09,340
You also had a place to get out because patterns do fail.
73
00:05:09,340 --> 00:05:10,540
They're not 100 percent.
74
00:05:11,260 --> 00:05:16,750
But the nice thing about these patterns is so many people pay attention to them that they give you a
75
00:05:16,750 --> 00:05:20,020
little higher percentage probability.
76
00:05:20,980 --> 00:05:27,040
And the next video, I'll take a look at something called a dodgy candlestick and the myriad of.
77
00:05:27,980 --> 00:05:29,210
Different types.
7506
Can't find what you're looking for?
Get subtitles in any language from opensubtitles.com, and translate them here.