Head And Shoulders Pattern Rules || Inverse Head And Shoulders Pattern Rules- Dehati Trader

Introduction

Major Reversal Patterns

The Head And Shoulders Pattern Rules

The head and shoulders patterns strategy are the most profitable at any time only we should remember some important point at the execution of the head and shoulders pattern rules. These rules are very common to all Reversal Patterns that is 

Rule.1: Always remember that at the time of pattern breakout the Volume must be greater than the previous some candle.

Rule.2:  Always take the trade at the breaking of the important trend lines.

Rule.3: Always remember that larger patterns are more powerful than smaller patterns.

Rule.4: The Top is more volatile than the Bottom

The Head And Shoulder Reversal Patterns

The Head And Shoulders Pattern is always formed in the uptrend and it's reverse the trend in a downtrend. If I compare all the reversal patterns the head and shoulders pattern is a more reliable pattern. This is the king of the major reversal patterns. 

To understand the head and shoulders reversal pattern you must know about Trend Line: Basic To Advance Prize Action(How To Use Trend Line). If you read before, you know that the uptrend trend reverses into a downtrend when the uptrend line is broken and taken resistance on the uptrend line then the trend is reversed into a downtrend.

There is the point to notice that before breaking of trend line it makes the higher high. Those two higher high the first is left shoulder and the second is the Head. Another lower high is formed after breaking of the trend line. This is the complete head and shoulders patterns.

When I sell in head and shoulders reversal pattern?

Head And Shoulders Pattern Time Frame

Head And Shoulders Pattern Stop Loss

Head And Shoulders Pattern Target

The Inverse Head And Shoulders Pattern Rules

The inverse head and shoulders patterns strategy is also a very profitable strategy for any trading style. But always we must remember some important things at the execution of the inverse head and shoulders pattern rules. These rules are very common to all Reversal Patterns that is 

Rule.1: Always remember that at the time of pattern breakout the Volume must be greater than the previous some candle.

Rule.2:  Always take the trade at the breaking of important trend lines.

Rule.3: Always remember that larger patterns are more powerful than smaller patterns.

Rule.4: The Top is more volatile than the Bottom.

The Inverse Head And Shoulder Reversal Patterns

The Inverse Head And Shoulders Pattern is always formed in the downtrend and it's reverse the trend in an uptrend. If I compare all the reversal patterns the inverse head and shoulders pattern is a more reliable pattern. This is the king of the major reversal patterns. 

To understand the inverse head and shoulders reversal pattern you must know about Trend Line: Basic To Advance Prize Action(How To Use Trend Line). If you read before, you know that the downtrend reverses into an uptrend when the downtrend line is broken and taken support on the downtrend line then the trend is reversed into an uptrend.

There is a point to notice that before the breakout of the trend line it makes the lower low. That two lower lows.  The first is the left shoulder and the second is the Head. Another higher low is formed after the breakout of the trend line. This is the complete inverse head and shoulders patterns.

When should I buy in inverse head and shoulders reversal pattern?

Before, you know about that when you buy it? you must know about the How to draw the Neck Line of inverse head and shoulders pattern? The neckline of the inverse head and shoulders patterns strategy is very easy you pick the two-point first is the top of left shoulder and head and the second is the top of right shoulder and head and draw a straight line with both points that is the neckline of inverse head and shoulders patterns. 

Now, answer the question that is when should I buy in inverse head and shoulders pattern? There is two-point to buy first is when the trend neck is broken with the volume we take the position as long but, if the volume is not more than the previous candle then the second is wait for the retracement and buy when the retracement is taken support on the neckline and come back in the upside.

Inverse Head And Shoulders Pattern Time Frame

Now, we talk about, which time frame is best for inverse head and shoulders pattern. Three types of share marketers use the inverse head and shoulder reversal pattern. 

first is the intraday trader, if I talk the inverse head and shoulders time frame for an intraday trader is 15 minutes time frame. 15 minutes time frame is my favorite time frame. my second favorite time frame is the 5 minutes time frame for intraday trading.

Inverse Head And Shoulders Pattern Stop Loss

Stop Loss is one of the great factors that you never miss for intraday/any trading style. If I talk about inverse head and shoulders pattern stop loss that is the perfect stop loss is the low price of right shoulders in any time frame. I try to understand you in the picture that is given below...

Read Also: Trend Line: Basic To Advance Prize Action CH-3 (The Fan Principle And The Channel Line)

Inverse Head And Shoulders Pattern Target

Profit booking is also important as like stop loss. If you do not know about the target of the inverse head and shoulders pattern rules you can miss your profit sometimes so, you must know about the target. 

In the inverse head and shoulders pattern, the target is the low price of the head to the neckline is a perfect target. after measurement of the low price of the neckline to head. take the target from neckline breakout till that low.

Why Sometimes Head And Shoulders Pattern Failure

There are some common questions related to head and shoulders patterns asked by people-