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Trading with Pattern

Head & Shoulder patterns are known to be indicators of a market reversal, this pattern may also occur in an inverse fashion where the head rest at the bottom of the chart, and is commonly known as "inverse Head & Shoulder".

To increase the probability of trades placed, chart pattern can be used in conjunction with an additional indicator. (eg: Fibonacci retracement tool)

Can you see a pattern on "ES" this morning?

ES on Oct 17, Asia hour

Can you see the Inverse Head that is resting on PAPLine-S2?

ES on Oct 17 ==> A IvH&S

How would you place your trade entry with this pattern? Let's pull out Fibonacci retracement tool from our indicator list. (most charting software should come with this indicator)

IvH&S with Fibonacci

Of course, there are many other important aspects such as managing risk, but chart patterns can be easily applied to serve the novice as well as the advance traders.

Happy trading :)

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