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Stock Market Charts: Head and Shoulders Pattern

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What is the Head and Shoulders Reversal Pattern? -The stock bounces off of the support line three times, making a head and shoulders pattern -On the first shoulder, the volume is high -The volume is lower on the uptrend that creates the head -People are not voting for the stock to go up. This low volume creates the head -Important to understand: If the stock bounces and hits the support line again (after the last shoulder), the line becomes a resistance line. You want to make sure it doesn't bounce down again because that would mean the stock is going below the resistance line. -A three month pattern is healthier than a two day chart pattern How to Trade On the Pattern: -Typically, people wait to trade until the stock breaks the neck line region and they trade on the down side (if there is enough volume) Continue to learn with me at: http://tradersfly.com/ Check out my courses at : http://rise2learn.com Facebook Fan Page: http://www.facebook.com/tradersfly/ Get My Charts on Twitter: https://twitter.com/tradersfly/
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Text Comments (20)
Carlá. (2 months ago)
could this be a double bottom?
L (2 months ago)
Hey mate, Might be an obvious but for INVERSE head and shoulders, would the volume bars switch roles? Should the left shoulders volume be less than the heads?
Tom Lomax (1 year ago)
Thanks Sasha. Presumably you also expect to see further decreased volume on the right shoulder?
Tom Lomax (1 year ago)
Got it - thanks for clarifying!
Mike Lee (1 year ago)
thanks for the video, do you feel that Nasdaq is going through a head and shoulder pattern and do you see a bullish uptrend or no now?
coffeeman (1 year ago)
i was taught volume matters on bullish patterns and not for anything bearish
Good insight
Crypto BR (2 years ago)
Hi Sascha, Great Video. Can you also explain the pullback rate and what that represents? According to Bukowski it is for a H&S top pattern 50%. However, is that 50% regarding the move of the price before retracing or the retracing rate somewhere at the trend before meeting the price target? example. A) breakout price is 5 euros and target 2.50 ( so its a -2.50 move) is the pullback to be expected at 50% of 2.50 =1.25 at 3.75? B) breakout price 5 euros and target 2.50 , with a pullback happening at a random point before meeting the target and retracing 50% from where it started retracing? hope you could clarify. best,
Ravi Worldrichman (2 years ago)
you're really help for beginers
Bill Ott (2 years ago)
excellent video, . It looks as if it's forming now.Question..why is the Nasdaq future over 400 pts. down.? For example todays current  is  4795 but future is 4384?  thank you
Bill Ott (2 years ago)
Go to MarketWatch and click on the futures tab for the Dow, s&p , and nasdaq. Nasdaq close today is 4737, but future nasdaq is 4336 , -400.. Can't seem to get an answer.Thanks again..
Alexander Senna (2 years ago)
thank you, i have a quick question. Do all or most patterns work both daily and Intraday?
Alexander Senna (2 years ago)
i see, so what advice would you give someone who is more of a day trader. im studying everything regardless and your videos help a lot, but i seem to find more books and online content for swing trading rather than day trading.  thank you 
Axel Markel (2 years ago)
Good informative video!!!
ibayley72 (3 years ago)
Sasha, thanks for replying, I am new to forex and have questions about a few things such as "trailing stops " etc, could I message you somewhere?
ibayley72 (3 years ago)
which time frame is this good for ? if I want to do day trades?
Ashton Ball (4 years ago)
How does the volume come into play during the right shoulder? Should an increase  provide confirmation or does it not matter?
Frank Leo (4 years ago)
Hi, a good example of this video would be the pattern Gogo had in 2013 Nov up to 2014. I liked the videos you provided, and I would be happy to share the examples I found for each of the pattern. Could you then, in return, upload more complicated patterns? I'll be happy if you can send me some directly and I would be happy to share your videos to others.
Thanks for the video. You explain this much more clear than most others.
Samer Awada (5 years ago)
how much money do you make on the market in a month?

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