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Head and Shoulders Patterns

Head and Shoulders Patterns 64% Win Rate

Head and Shoulders Patterns 64% Win Rate

Head and Shoulders Patterns 64% Win Rate is what I achieved for the first trimester from 2020. This means there was 7 winning trades from a total of 11 daily head and shoulders patterns.

The premise

We are in April 2020 now, so, it is a good moment to look back into the first trimester of 2020 and analyse our trades. Therefore, we need to see what we did good. And, more important, we also need to see what we did wrong. The point is to constantly improve our trading performance. So, I invite you to take a look back into all the eleven head and shoulders patterns from January to March 2020 from daily chart.

What Head and Shoulders Patterns did we have?

XRPUSD win +1% for a risk of 0.5%.

GBPCHF  loss -0.5% (full initial risk) – morphed into Rectangle Pattern on GBPCHF.

EURUSD win +1% for a 0.5% risk.

AUDUSD win +0.8% for a 0.5% risk.

NZDCAD  loss -0.08% (almost breakeven) for a 0.5% risk. It would’ve been a win but I trailed my stop before the first retest of the broken neckline and a loss is still a loss.

#VZ loss -0.2% for a 0.5% risk. It would’ve been a win but I also trailed my stop before the first retest of the broken neckline. But it’s still a loss and that doesn’t change the outcome.

EURJPY loss -0.5% (full initial risk).

AUDJPY win +1.6% for a risk of 0.8%.

NZDJPY win +0.8% for a 0.8% risk.

BTCUSD win +2.6% for a risk of 1%.

Pyramid trade on XRPUSD daily chart win +1.2% for risk free as I only risked the initial XRPUSD trade profits.

How these statistics looks like?

We have 7 winning trades and 4 losing trades which means 64% win rate. Also we have a +9.00% gain for winning trades and a -1.58% loss for losing trades. Therefore, the net gain is +7.42%. And last but not least, the minimum risk reward ratio is 1:2 with only one exception: NZDJPY.

What can we learn from these head and shoulders patterns results?

First of all, as I said in almost every previous article, the main problem here is that I left a lot of money into the market. Almost every trade from the above had at least a risk reward ratio of 1:3. But, there’s a single exception and that is the NZDJPY trade. So, if you take a look again, you’ll see that instead of 1:3 risk reward ratio, I managed to close my trades at 1:2 risk reward ratio. This is a big problem because with 7 winning trades, it means that I left into the market almost 7%. What does this mean? It means that instead of a net gain of +7.42% I should’ve had 14.42%. So, I left half of the money into the market. Pretty bad, right?

The conclusion

The most important conclusion is that we always need to analyse our past performance and keep track of our evolution. There’s no better way to improve your trading skills than that. I invite you to also read about Inverted Head and Shoulders 71% Win Rate. You can also read Cup and Handle Patterns 17% Win Rate and Double Bottom Patterns 45% Win Rate.

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