Loading ...Bullkowski
This is a site that ranks Chart Patterns
Here is his research on INHS
74% meet their objective …Pattern Ranks 7th of 23 in reliability
Much more than the simple pattern must be considered as well..ie..volume and more
http://thepatternsite.com/hsb.html
Then there is this disclaimer
Experienced TA guys KNOW this…Novices FWIW
I agree with him on the importance of symmetry.
Some of the head and shoulder patterns being shown here are lacking in that department.
He is advocating a novice approach to trading them though.
They should be bought at the right shoulder b\c gaps occur many times the next day.
Then you are left chasing or miss the move entirely. Case in point last Friday…
https://stockcharts.com/h-sc/ui?s=NUGT&p=60&b=9&g=5&id=p23499808098&a=464995380&r=1466973682945&cmd=print
I’m glad you are having a learning experience out of this Fully.
Now go out there and get you some right shoulders grasshopper. ( Kung Fu reference ) 🙂
Here’s a little tutorial for newbies in the art of h\s trading on a micro scale. But you get the drift.
Anticipation is the key.
https://stockcharts.com/h-sc/ui?s=NUGT&p=60&b=5&g=5&id=p64765012360&a=464995380&r=1466974915027&cmd=print
Tommy, please post a graphical counterpoint to Fully’s post here
https://goldtadise.com/?p=374291#comments
indicating why the right shoulders SHOULD have been bought in what was a developing bear market in hindsight? Thank you.
here you go…
https://stockcharts.com/h-sc/ui?s=ABX&p=W&yr=11&mn=0&dy=0&id=p42424947850&a=464997117&r=1466976134692&cmd=print
What I’m reading from the note in this chart is that spotting and trading an IH&S pattern works …. until it doesn’t – which I believe should technically count against the extraordinarily IH&S % success rate.
Is there a limited ‘duration’ after which a IH&S formation is profitable after to be considered part of the 98%?
Again, thank you.
First of all, that area in question is where the right shoulder of the bigger pattern is. (see that) ?
Secondly, if you are paying attention to the larger picture (monthly) like you should be, does an IHS make sense when the macd is crossed down?
https://stockcharts.com/h-sc/ui?s=ABX&p=M&yr=11&mn=0&dy=0&id=p12651686355&a=464999559&r=1466977716669&cmd=print
I realize you tried to follow through on this post (looking at the macro view)
https://goldtadise.com/?p=374327
However, please tell us (graphically) how would one have discerned several sequential false IH&S in Fully’s chart vs. the various macro view IH&S you pointed out. Not taking a side here, but I do want to see what (based on real time observations – not hindsight) would point to a macro view IH&S @ 98% call vs. a micro?? view false IH&S pattern. On it’s face I tend to agree that any pattern that’s called at 98% success rate is going to be arbitraged away quite soon. Thank you.
here it is again…
https://stockcharts.com/h-sc/ui?s=ABX&p=W&yr=11&mn=0&dy=0&id=p42424947850&a=464997117&r=1466976840252&cmd=print
So from what I’m gathering is that you see only one of Fully’s rectangled IH&S patterns being callable and while the first one (upper) failed in short order (I’m sure one would have bailed on the breakdown), the recent one in Dec would have been equally convincing and in this case a great success. I’m not a technician but I think it’s clearer where you and Fully are coming from in reading these particular patterns. Thanks.
I took another look at your notes and I would not have dismissed the IHS pattern that formed just after the ‘not truly failed’ pattern (after big drop) and it would have been strike II had anyone bought that one (would have only been up a few days, then re-plunge). Maybe just to complete this discussion tell why the right shoulder of the post-plunge IHS pattern would NOT have been counted – to me it looked nearly as clean as the two you identified.
Look at this monthly chart and you can clearly see the positive and negative divergences.
It should be self explanatory.
https://stockcharts.com/h-sc/ui?s=ABX&p=M&yr=11&mn=0&dy=0&id=p12651686355&a=464999559&r=1466977716669&cmd=print
The monthly chart clearly shows what direction one should be trading when you see the direction if the divergences and the direction the macd is crossed.
https://stockcharts.com/h-sc/ui?s=ABX&p=M&yr=11&mn=0&dy=0&id=p12651686355&a=464999559&r=1466977716669&cmd=print
Like Mark points out in his posts, he is factoring in a lot of other information than just a couple of lines on his charts before he makes a trade.
Likewise, you should be looking at multiple time periods to gain a more informed view of the action.
Ok I think this is the crux of it and Fully might agree – OTHER TA considerations must be made in order to see clearly ‘successful’ IHS patterns. Can’t argue with that – although I’m still quite skeptical of the 98% success rate – to be investigated further – I’m guessing had these other considerations been part of the discussion from the outset and the focus not been solely on IHS, it would have taken a diff’t course. Logging off…thanks.
You can lead a horse to water but you cant make him drink.
Good Night Tommy
YYZ thank you for this discussion…as we now understand
So there we have it 98% of all INHS patterns with a host of collaborating charts and indicators and circumstances will work out !
Good luck trading this grasshopper
Buy the right shoulder ? where and when ? there will virtually always be a breakout after a right shoulder ?
at least naïve at worst bullpucky !
You may keep Looking Tommy but you will never find the holy grail of TA
The best you can do is learn the patterns and don’t concern yourself with somebodies idea of how often they play out
Follow the pattern….get the odds in your favour …and keep your eye on the ball