Been hearing about these patterns everywhere but honestly not sure what makes them so reliable.
Tried spotting head and shoulders on EUR/USD charts but half the time I’m second-guessing if it’s actually forming or just noise.
Patterns can mislead you if you jump in too soon.
These patterns work because they reveal shifts in buying and selling pressure. Head and shoulders? Buyers are losing steam after three failed attempts to break higher.
Double tops form when price smacks the same resistance twice and gets rejected. Wait for the neckline or support to actually break before you trade.
Don’t force patterns that aren’t there. The good ones jump out when you zoom out and check the bigger picture.
They’re decent reversal signals but don’t rely on them solo. I always combine them with support and resistance levels for confirmation.
Traders overthink these patterns. For head and shoulders, look for three peaks with the middle being the tallest. It’s valid when price breaks below the neckline connecting the two lows. Double tops are two similar highs that fail to break resistance. Trade the break below the valley. Volume is key. Real patterns show less volume on the second peak or shoulder. If there’s no volume drop, you’re likely seeing consolidation instead of a reversal. Avoid charts under 4 hours; they’re too noisy.
Your second guessing is smart. Most retail traders see patterns everywhere because they want them there.
I track pattern trades in a spreadsheet. Head and shoulders work about 60% of the time for me, and I’m picky about which ones I take. The fake ones usually have weak volume or form too fast.
Double bottoms are way easier to spot than double tops. Markets fall faster than they rise, so you get cleaner rejection levels.
What helped me was waiting for the pattern to complete AND get a retest of the breakout level. You miss some of the move, but you avoid tons of false breakouts. Risk management beats pattern perfection every time.