Nick_Core

Bitcoin: Smaller Time Frame Head & Shoulders

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
This has not fully formed, confirmation is key on this pattern. If this forms properly:

Entry: Approx. 8k (Neckline break as shown above.)
Exit: $7,627 (Measure from the head peak to the neckline, add that to the neckline break)
Stop loss: $8,304 (Always above the R shoulder)

  • I am not 100% satisfied with the volume set up on this, but generally H & S are never perfect. For now, this is close enough. I will be watching the decline of the right shoulder for any volume variances of the H & S rules to potentially cancel out the trade.

  • Entering this trade, I always wait for the confirmation break of the neckline instead of doing so at the peak of the R shoulder, the formation needs to confirm.

  • I typically expect a neckline retest upon the break, my stop is set above the right shoulder because many times buyers temporarily rally the price up out of a neckline break for one more go at a rally. There is some support directly below the neckline, a retest above the neckline would not be out of the question before completing the formation.

  • The neckline break should occur with a volume spike. You can see the volume surge with the help of a volume indicator like the O.B.V. or C.M.F..

  • Patience is the key for trading head and shoulders patterns.

I highly recommend you take a look at the two related ideas titled "Learn To Identify & Trade The Head & Shoulders Pattern Properly" at the bottom of this idea for further studies.

Thank you for reading and please support by clicking like on this analysis. Like, follow, share and interact to help me stay motivated. Thank You! :)

This entire publication is merely a educational publication on how one would potentially trade this pattern. Do your own research and analysis and never rely on anyone including myself for financial advice.
Order cancelled: Entry never produced, H & S structure is no longer a valid structure in this idea. Note: There are still a few bearish qualities & bearish patterns forming. Those could still transpire at a later time as price action develops.
All posts are for educational purposes and are simply my views of markets conditions. Please see https://www.thetradingwizard.com/automation for access to free scripts.

Please do your own research and use my content to educate yourself.

Comments

Using CMF for volume confirmation of H&S. That’s quite unusual and not sure if a right thing to do. The high/low and period closure will affect the CMF direction. I think better to use volume bars.

Thanks for your hard work! I do appreciate your analysis.
+4 Reply
Nice to see adjustments to calls when the signs change. Keep up the excellent work.
+3 Reply
Nick_Core SloppySeconds
@SloppySeconds, Thank you
Reply
Bigger time frames, inverted head and shoulder.
+3 Reply
lisek15lisek Peymana71
@Peymana71, lol so funny that different people see something complete opposite to each other
Reply
Peymana71 lisek15lisek
@lisek15lisek, :)).he looked to shorter scale and i looked at bigger scale,this 2 idea can complete each other,but i did not believe in it,many other factors can help BTC drop.
Reply
@Peymana71, I'm not shure. I really don't like how the RSI is OB Zone. I Think the Bull rally is about to finish and take us down to 6.9K, but i cuold be wrong. Anyway, Thank for sharing this idea, have a nice trade!
Reply
Peymana71 JoseJoaquinCorralesLopez
@JoseJoaquinCorralesLopez, yeah me and my followers are ready for closing our long position from 5800 anytime and this is just another look at what other things we can see in chart.if you read this idea you can find at the end of it that i clearly said BTC have huge chance to start another downtrend to 5100 from here.Anyway,Good Luck.
Reply
Please stay motivated!
You are awesome!and very helpful!

+3 Reply
@danbut, thank you very much
Reply
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