Nico.Muselle
Short

USDJPY - Head & Shoulders 2618 opportunity

FX:USDJPY   U.S. Dollar/Japanese Yen
We're presented with a Head & Shoulders formation and the right shoulder has double topped, broke through the neckline and formed a . 618 retracement to test the highs again. This might be a good time to short if current candle closes below the neckline which aligns nicely with the . 618 retracement . RR is definitely worth giving it a try
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If I had a nickel for every time somebody saw a "H&S" pattern, I'd be filthy rich. :)
I did note below you were not trading that pattern, and all I'd add to that is that a true H&S requires a volume component that is *vital* to validating the signal. Without volume, H&S is little more than human minds trying to form noise into signal, something we're pretty good at, regardless of the actual presence or absence of any signal. :) Cheers (And now Fed minutes & old Sankei news coming across the wire has made the play work.) Magic. :) :)
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As you probably might know, volume in FX shows only a fraction of the actual volume going on as it is decentralized. While it may be true for other types of trading, in FX it might even be tricky to base your trades on the volume number you see on your chart. They might be quite different from the global volume.
Anyway, as said, I traded the 2618, which turned out pretty well :)
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SetagayaGirl PRO Nico.Muselle
Trade turned out nicely.
Yes, I'm aware of the problem of trying to assemble global volume data. :) The largest dealers, however, probably correlate > 0.9 in many cases, but there are going to be times of course when they're off the mark by quite a bit.
I'm really "old school", so while I don't make decisions merely on volume, I still like to consider it, especially in weekly TFs. Cheers
+1 Reply
SetagayaGirl PRO SetagayaGirl
When I say 'correlate' here, I'm speaking of level changes, naturally, not raw numbers.
+1 Reply
On larger timeframes and with a big broker, volume levels could be indicative, that is correct ... :)
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IvanLabrie PRO Nico.Muselle
Nice going Nico! You pattern traders love these countertrend moves eh?
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It could still end up working, if the 5th wave ends up being a truncation... (see my usdjpy elliot wave chart)
I saw this and knew people would want to short that H&S shape, but the thing is they rarely work.
I got a limit buy waiting at 118.94 with a stop at 118.47.
Should be interesting. If this fails and usd falls today, I also have a usdcad short running.
Good luck!
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right shoulder had a higher high, low probability
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I'm not trading the H&S pattern but the 2618 pattern, the H&S is only used to determine what the target could be
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angrybear168 Nico.Muselle
gotcha
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