Head and shoulders (also inverse) is a popular pattern based strategy. Examples found below are formations on M1, and to scalp. An initial target of 15-20 pips is fine and sell 1/2, or whatever exit you choose, main aim is to grab some pips.
We are entering (long/short) aggressive on the right shoulder, and hoping for a trend reverse. If it doesn’t reverse it is false signal which do occur as well. Please note in strongly trending markets if we counter trend trade, it is generally a lower hit rate, than in a ranging market. It is powerful, as it gives very early entry, and good risk to reward ratio
Additionally you can look for S&R level with this as I marked below.
Below are three examples in my main currency pair AUD and a good h&s pattern on JPY. it can work on any pair. the better the structure, the better the move sometimes…patience is key…AUD setup gave over 50 pips and superb entry, at a key S&R level 10360..even though trending down, pair was ranging allowed the counter trend trade to be success…JPY pairs have been trending 1 direction, so H&s counter trend had to be fast exit…
- For LONG: Go long on completion of right shoulder of the pattern, on bullish candlestick bar close, at a support area
- For SHORT: Go short on completion of right shoulder of pattern, on bearish candlestick bar close, at a resistance area
Target 15-20 pips.
Another one on AUD, at same level of support…counter trend trades are safer on ranging currencies like AUD…