Categories
Head and Shoulders Patterns

Head and Shoulders Pattern on EURUSD

Head and Shoulders Pattern on EURUSD

Head and Shoulders Pattern on EURUSD is one of the most scholastic patterns from the market in a long time. Let’s take a closer look.

The premise

The head and shoulders pattern on EURUSD it’s a one of a kind. It has everything a trader can want from a pattern. Why I’m saying that? Because it really has everything. First of all it’s about the location. Therefore the SHS pattern on EURUSD is located at the end of a rising wedge. Also, that means the pattern is located at the end of a pullback. As a result the pattern tells you that the pullback is finished and the sellers are about to step in again.

head-and-shoulders-pattern-on-eurusd
Head and shoulders pattern on EURUSD daily chart

History repeats itself

They say that anyone who does not know history is doomed to repeat it. Well, in this case, we actually want to repeat the history. Why I’m saying that? Let’s take a closer look at the daily chart of EURUSD again. Or let me ask you something. What is better than a head and shoulders pattern? You’re right. Two head and shoulder patterns into the same daily chart.

two-head-and-shoulders-patterns-on-eurusd
Two head and shoulders patterns on EURUSD daily chart

How did I trade the head and shoulders pattern on EURUSD

That is a simple one. Therefore, all I did was to place my sell stop order slightly below the January 10th 2020 daily candle low and see what will happen.

The outcome

From this point forward every thing is just simple. All one has to do is to check the trade once per day. Also, that should happen at the end of the trading day. Now, let’s see again why is the history so important. Certainly it’s all about expectations. Therefore, when you know what to expect from your trade you have no emotions. And, above all, this is the most important tool a trader can get. If you take a look again at the daily chart of EURUSD you’ll se, again, the same thing. The same strong bull candle appeared before a huge drop. This might also be considered a kind of a bull trap. And, also, you can see the exact type of retest in the Head and Shoulders Pattern on GBPAUD article.

the-outcome-of-the-head-and-shoulders-pattern-on-eurusd
The outcome of the head and shoulders pattern on EURUSD daily chart

I think there is no need to add something more about the outcome of this trade. The chart simply speak for itself.

The conclusion of the head and shoulders pattern on EURUSD

As I also said in this post Double Bottom on EURHUF the best conclusions are made from the loses. But, we always need to keep in mind the importance of the money and risk management. Without those two tools we can’t survive that much into the market in order to catch those kind of moves.

Stay Informed

If you find my articles useful just scroll a bit and follow me on twitterFacebook or sign up to my newsletter for more future updates. I promise you won’t regret it!

Leave a Reply

Your email address will not be published. Required fields are marked *