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The practical use of a Head and Shoulder Chart Pattern – illustrating GBPJPY

Today when I was doing some private coaching with our facilitators, one of the examples that was shown was GBPJPY. Previously, I guided a short in GBPJPY in 4M.

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Daily chart on GBPJPY Head and Shoulder

 

After the trade in 4M, I tweeted again on GBPJPY. However, at that point, there are too many supports. Therefore in my tweet, even though there was a trigger, but that trigger was very near to one stated support 14950-60.

 


Now we have another smaller head and shoulder forming.

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Head and Shoulder 1234

 

At the right shoulder, we can see a 1234, with 2 being few boxes high.

 

Below 14985 has immediate support 14950-60 (still same message). However this time, due the to length in consolidation (in making that 1234), there could be a stronger chance it is supported only at 14810-30 14770-80

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1234 within the smaller Head and shoulder

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7 thoughts on “The practical use of a Head and Shoulder Chart Pattern – illustrating GBPJPY”

  1. Chen Junguo says:

    Binni thats means the longer it takes to form the 1234 the more level of support it is gonna break?

    1. Binni Ong says:

      generally yes, the longer the consolidation, the more chance ppl has to accumulate or distribute. thus stronger power of movement

  2. Ou Yong says:

    The second chart is very detailed. Thanks Binni.

  3. Daniel Ku Guet Liang says:

    A question on HS: if the 2nd shoulder exceed the height of the 1st shoulder, is the HS still valid? when does a HS become invalid (other than the 2nd “shoulder” exceed the height of the head)? Thanks in advance for your thought.

    1. Soh Tiong Hum says:

      Head and shoulders pattern is still valid even if right shoulder exceeds left shoulder. Critical condition is as you pointed out i.e. exceeding the height of the head. Other condition: Shoulder continues to track sideways making multiple tops and bottoms between the head and the neckline. It could evolve then into other patterns like channels, triangles. The old head and neckline could still remain resistance support levels but the new pattern will precede.

      1. Daniel Ku Guet Liang says:

        ah… I had better understanding abt HS now. This is truly good learning from you & Binni’s expertise & experience. Thank you.

        1. Soh Tiong Hum says:

          Did a posting here to put things together. Please take a look.

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