Video 27 A&B: Head and Shoulders

Question 1

Major Reversals usually need at least 5 big bars or 10 small bars in both reversal legs (Legs 1 and 2). 40% chance of a swing trade.

Answer 1

If legs have fewer bars, only Minor Reversal likely (scalp trade). Then either Trading Range or trend resumption.

Question 2

Every Head and Shoulders Pattern is a trading range, and a breakout would be a trading range breakout.

Answer 2

Question 3

Example of Head and Shoulders breakout of a Bear Trend. See Photo

Answer 3

Question 4

Most head and shoulder reversals are minor and lead to trading ranges

Answer 4

Question 5

Same: Most head and shoulder reversals are minor and lead to trading ranges. You need some evidence/sign that the bears are strong (in this case). They need a Break Out below the bull trend line.

Answer 5

Question 6

Again, you need a strong break below the trend line to get a major reversal after Head and Shoulders Pattern

Answer 6

Question 7

A typical way to enter a head and Shoulder is with a stop below the neckline. The neckline is either a line drawn from the pullback after the left shoulder. See photo

Answer 7