The following conditions are preferable for an ideal Head and Shoulders pattern, although an ideal pattern doesn't mean have a 100% win rate:
1. The head zone should be in the oversold zone on the RSI indicator
2. Left and Right "shoulders" can be higher the top of the "head" part of the pattern
3. LL of the head should be closed not lower left shoulder's LL
4. Right shoulder should break the neckline of the pattern
Enter: You can enter after the candle closes below the neckline after the right shoulder is formed or wait and enter after the price will retest the neckline zone.
The same rules apply to the inverted Head & Shoulders pattern but vice versa for the short position.
Remember there is no pattern with a 100% win probability. Therefore, always put a stop-loss. Good trading!
1. The head zone should be in the oversold zone on the RSI indicator
2. Left and Right "shoulders" can be higher the top of the "head" part of the pattern
3. LL of the head should be closed not lower left shoulder's LL
4. Right shoulder should break the neckline of the pattern
Enter: You can enter after the candle closes below the neckline after the right shoulder is formed or wait and enter after the price will retest the neckline zone.
The same rules apply to the inverted Head & Shoulders pattern but vice versa for the short position.
Remember there is no pattern with a 100% win probability. Therefore, always put a stop-loss. Good trading!