An inverted head and shoulders pattern just formed on the daily SPX chart. The standard trade is depicted in this chart, with a stop loss at the right shoulder and a take profit equal to the head's height.
None of my contents is financial advice.
Good trading
None of my contents is financial advice.
Good trading
Comment:
We can enter now to avoid missing the entry, as price action is showing signs of rejection around the neckline price area. RR is of course not as good, it's about a 1:1 wich means we need an estimated probability much higher than 50% to be confident that our trade is a good trade. H&S has a success rate of about 80%, though this probability is esteemed by Thomas Bulkowski in his book The Encyclopedia of chart patterns. As with any subjective method, this probability is not clearly defined with a sistematic backtest, hence the need to go far beyond 50% probability with a 1:1
