Original subtitles

Hello, traders, and this session we'll be learning about head and shoulders pattern.

Traders, have you read or heard about this pattern, if you have been trading for a long time, then

for sure you would have heard or come across this pattern.

Maybe you would have read about it in books, audio to watch videos about it, even if you have not

heard about it.

No problem, because today we are going to learn about this pattern.

And also I'll be showing you how to have a competitive edge while working on head and shoulders pattern.

OK, so let us start credentialled.

The pattern can be formed during an upturn as well as downtrend.

First, let's see how this pattern looks while working on uptrend when we are looking for buying opportunity

in head and the pattern we call it as head and shoulders pattern bullish, which can also be called

as inverse head and shoulders pattern traders watch closely.

As of now, does just a drawing the head and shoulders pattern look somewhat similar to this?

This is called a left shoulder.

This is called as the Head.

And this is my right shoulder.

OK, now to consider this as the head and shoulders pattern, there are two conditions.

The first condition is we need to have similar tops.

So what do I mean by this?

If I draw a trend line like this, can you see the height of all these scandals is somewhat similar.

It has to be similar like this.

This trend line is also called Nicklen.

OK, remember this, but in the actual market.

This is also considered as Nicklen.

But this also can be considered as Nicklen, there might be 20 to 30 percent difference because in actual

market traders make these patterns.

We need to understand this.

OK.

Second condition is left shoulder debt has to be treated in the right shoulder debt.

My left shoulder depth is so much.

This has to be greater than the right shoulder depth.

Which is this?

Can you see the difference in depth?

This is my second point, if both of this condition is met.

Then we call it as head and shoulders pattern, OK?

I hope you have understood the explanation so far.

Now, I'll be showing you how gentle people are still following the old method by reading books or watching

videos of so-called experts, I will use red color to try and show you how gentle people train.

Does the left shoulder.

Does the head.

And this is the right shoulder.

If their stock forms a candle like this about the right shoulder level.

With good volume.

And break out like this.

They will take entry at the height of the breakout and.

And target, they will keep the length of the head, which is this much.

They will take it as much as target and place it about their entry price.

And Stop-Loss, they will keep below the right shoulder.

Traders, are you aware of the strategy?

People have been following the same pattern after reading about it from books or learning it from people,

so-called experts today will be learning a new way to train head and shoulders pattern.

OK, so let us start.

First, we need to wait for the candidate to form left shoulder.

When the stock is in halfway to the right shoulder like this.

We will draw a trend line.

As soon as we get a breakout, kind of let us along with Walthall.

We will enter the trade at the height of the breakout candidate.

And Stop-Loss, we will keep at the low of the breakout and.

And the target will be here, the same place where a lot of people are thinking about entering the trade.

At this level, you will exit 80 percent of the quantity and your profit.

For the balance, 20 percent of quantity, we will keep Stop-Loss about our buying price, which can

be here.

Why do we do this?

Because in case the market goes up, we will be able to make extra profit.

But even if the market goes down, we will still be in profit because the stop loss of the balance,

20 percent quantity is about our entry price.

Correct.

Did you get my point?

If you find this confusing, then just go a little back in the video and watch this.

You will get full clarity.

Now, traders, what can be the reason for me to tell you to buy at this level?

There should be a valid reason for me to enter the trade at this level.

Right.

What can be the reason?

Now watch closely, Lou.

Hi.

Hi.

Hello.

Hi.

Hi.

Hi.

Hi.

Hi.

Then breakout with volume confirmation.

What strategy is this?

This is a second strategy, correct?

We have complete one hour lecture about the strategy, not course, right?

We have discussed how to enter and exit the trade and the strategy.

So this is the reason for us to enter the street at this level.

Traders, I hope you have understood this now why we enter the trade at this level right now.

Let's see some examples in the market and see how Satija works.

Trade as a first example sale in India, daily timeframe, OK.

This is my left shoulder.

This is my head.

And this is my right shoulder.

OK, left shoulder, head and my right shoulder to consider this as the head and shoulders pattern,

what do we need?

We need similar top.

So if I draw a train line like this.

Can you see they have similar top, correct?

Now let's understand what gentle people do.

See, traders, this trend line is also called Nicklen, OK, when this Nicklen breaks, the stock gives

up Precourt.

Can you break out here once a lot of traders, so they go to break out.

Can you see the volume?

How many people have entered the trade with the belief that the market will go up, but what did the

market do?

The market went down after going down what the market did.

It took the stop loss of all the people.

At this level, whoever had kept stock losses to cover all the stock losses, now, can you understand

how people are following the same old pattern for a very long time, all the smart traders or big operators

you can see, they understand that people will buy here.

So what do they do?

They make the market go up.

And then a big fall and they take over everybody stop losses, but you price action traders, right?

You understand this job.

So what you do, you follow a strategy.

A strategy is what?

Hi at this hi.

Hi.

You wait for Precourt, so you get breakout, this breakout is also with Walloon confirmation credit,

as you remember type two strategy, right?

Breakout with volume confirmation.

Now, our entry will be at the height of the blackout scandal, as Stop-Loss will be at the law of the

blackout scandal, which is here at Target, will be.

Where a lot of people enter the train.

We already have seen where a lot of people enter the trade right after the breakout, you see volume,

that is where a lot of people have entered the trade.

So you will keep your target as this.

At this level, you will book 80 percent of the profit, at this level, you will book 80 percent of

the profit.

So what do I mean by this letter?

Said the code.

You bought 10 quantity of the stock.

As much as 80 percent of the stock eat, correct?

So eight quantity, you will exit here.

So the balance to quantity, that is 20 percent.

For the balance, 20 percent, you will keep Stop-Loss above your entry price.

OK.

And with.

For this 20 percent, if the market goes even higher, we will try to extract those profits as well.

But if it goes down, no problem, it will be above our buying price, right.

Anyways, you will make profit.

This is my suggestion.

But if you want to book your hundred percent profit here, you can absolutely do that.

OK, so let us see one more example.

Critter's a second example, is calling the daily Time-frame to my left shoulder.

Does my head.

To my right shoulder.

So I've drawn a line like this.

Traders have already told you in the market straight line will not come all the time, sometimes there

might be 20, 30 percent difference.

OK.

So let's see what happened here at this Nicklen breakout Ganassi volume.

So there was a breakout with volume, what will gentle people do?

The gentle people will enter at the height of the blackout Kindle store, plus they will keep at the

low of the breakout cattle rate.

But to what happened, the market went a little up and then it went down.

Exactly.

Exactly.

Kim.

Took all the losses after taking desktop losses, the market went up.

Traders do think this is coincidence.

The market coming down exactly at these stop losses where a lot of people would have kept.

It had this topless.

And going up, what do you think?

This is not at all a coincidence, but we are price action traders, right?

What will we do?

Does my law.

This is my.

It is my Hielo.

And this is my high right at this level.

I will draw a line like this.

This line.

Has given me a breakout.

Can you see the breakout?

This breakout is with volume confirmation, we will enter a day of the breakout, Kendall.

Stop-Loss is the law of the blackout, Kendal.

Today, it will be a lot of people are entering.

When breakout happens, when you see volume that lot of people have entered you, you will exit 80 percent.

Eighty percent of your total value.

You will exit and the remaining 20 percent.

We'll keep Stop-Loss on right here.

And then wait for the market to go up.

In case the market goes up, you will have extra profit, but if you wish to take all 100 percent profit

here, you can do that the remaining 20 percent, you'll just leave it like that.

And Stop-Loss will be above whatever price you bought here so that even if you lose this trade.

Still, you will be in profit, right?

So this was a second example, traders, I would like to explain something to you.

With your train line, we get a breakout with volume confirmation.

We enter the trade and we exit the trade when a lot of people are entering.

Does this matter, which I have told you today, you will not learn it anywhere else.

All the books you read or the readers that you watch, everyone will tell you to buy.

At the Nicklen breakout, even my mentor told me to buy the Nicklen prickled after losing a lot of trade

following the old method, we started back testing and figured out this method, which you have learned

today.

This isn't my age.

We are made good amount of profits following this.

The main reason you're watching a course is to learn something new so that you can be better at reading.

Right.

What is the point of AM teaching you the same things that are in the books, which is old method and

do not work anymore?

What we need to be smart when we are trading, when we are smart and we do hard work, the market will

reward us very well.

OK.

Let's see some example on a lower timeframe, I'm taking Bank Nifty as an example, one minute time

frame.

OK, this is my left shoulder.

Does my head.

This is my right shoulder.

If I draw a nicklen, letus.

Commentary, what they will do.

They will enter at the height of the blackout when they get volume confirmation, if you go to futures

and see, you will get to know that there is volume here.

Does Milo.

This is my high.

This dodgy candle is my high.

This became my Hielo.

To speak in my heart.

This became my Hielo.

At this level, if I draw a trend line like this.

I'm getting a breakout, this breakout is with William Confirmation, you can go and check espera strategy

ARANTES should be here, right?

I have to play up and the target will be where a lot of people are entering right here.

Now, let's speak about the issue that happens when we are working with partners on a war time frame.

If you're working on one minute check.

Right, can accomplish topless at the law of the candle.

No, right, you need to give Buffer if you're trading on a lower timeframe, that is one minute to

minute three minute four, five.

We need to give buffer.

If I have to give Baffo, can I give it here?

No, right.

It has to be somewhere here.

Or here, right?

Thank you so much for my stop loss, can I exit the trade here?

No, right, because the risk to reward ratio will be very low in this example, you can see the market

going up and things like that, that doesn't matter.

There's just a one time thing because of poor ratio.

OK, because of poor Ahrari issue, we cannot trade with batons or no overtime.

But if you're working on a ten minute time frame.

There is no need to buffer up to this level, right?

You can keep a buffer at the low of the breakout candle itself at that time.

If you enter the trade, you will get good at any time frame after 15 minutes is suitable for swing

trading.

OK.

So in swing trading, also, that time, your target can be achieved and you will get good risk to reward

ratio, but on a lower timeframe, let us ignore this pattern.

Until now, we saw some examples of residential, the pattern on a bullish market right now, let's

see some examples of bearish market.

So what happens in potentially the British market?

The candlesticks will form a pattern like this.

Completely opposite to bullish head and shoulders pattern.

This is the left shoulder to the head and does the right shoulder.

As of now, this is destroying.

To consider this as a head and shoulders pattern, there are two condition.

First one, similar tops.

Which is formed here.

And then the depth of the left shoulder has to be greater than the depth of the right shoulder.

If the condition one and two are meant.

Then we call it as bearish, identical, the pattern, how do gentle people trade, they wait for the

head and shoulders pattern to be formed like this.

As soon as the Nicklen breaks.

And the Bricktown candle is formed with the volume.

They will enter the law of the president, Kanwal, which has given volume.

Target, they will keep same as the length of the head.

But how will we treat?

We will wait for the left shoulder and the head to be formed.

And at the middle of the right shoulder, we will draw a trend line as soon as we get a break down with

volume.

We will enter the trade at the law of the president, Kendall.

Stop-Loss at the height of the breakdown, Kandal.

And Target will be where general people enter the train.

Now, let's see some examples.

It as a first example for Don Trent, head and shoulders pattern, as I shall Motor Daily Time-frame.

See, this is the Nicklen.

This is my left shoulder.

Does my head.

This is my right shoulder, and Nicklen got broken than what general people will do.

The gender people entered in the scandal.

District, Candy.

Can you see the volume?

How many people have entered?

But let's understand what happened the next day, the next day, the market opened only at the slowly.

After people entering here.

The next day, the market opened only at this level making extra loss for people at this level.

A lot of people will keep the depth of the haters the target, right, so they would like Target here

somewhere similar to the depth of the head, what the market did, it opened only in Capetown.

And then the market went up and it took over everybody.

Stop-Loss, who would accept it at this level.

People went to what I kept a Stop-Loss here, right here or here.

It took over all the Stop-Loss.

Then what happened?

The market went to the market can be so brutal to you if you just keep following the old method.

Because everybody knows this is what is going to happen, whoever is new to trading will keep following

this.

They will lose all the money at this level and then they will see trading is a gamble.

Right, but what will we do?

Hi, Lou.

Lubi.

Lobolo.

At this level.

We will draw a trend line.

We got to break down.

This breakdown is with volume confirmation.

Can you see the volume of this scandal is higher than the previous candle we have discussed completely

about this in the previous lecture?

Right.

So our entry will be here.

Love the pregnant Kandal Stop-Loss will be here at the height of the Bricktown candle.

Our target will be where general people the at this candle.

Will be a target with a booked to profits before the market reacted, let's take.

We can book 80 percent of the profit here or hundred percent that is left to you, if you had booked

80 percent profit here and 20 percent of their stock, if you would have just left it like that, it

would have gone even lower.

You could have booked extra 20 percent profit somewhere here.

Right.

So this was our first example.

Now, let us the second example.

Traders now let us see one more example on a lower timeframe.

Hindustan, Unilever, 30 minutes time frame.

OK.

Is my left shoulder.

And this man, Richard.

Left shoulder, head and right shoulder.

If I draw a neckline like this.

At this level, you can see volume.

There is William.

General, people will enter here, right, and keep their Stop-Loss on Redhill here.

Or here, right?

So what happened after this, the market went up to cover certain people's toplessness.

After that, the market went down.

So we are prosection traders, what should we do?

This is my high.

Because my low, because my lower high and my level at this low, low we draw, this train line is giving

us a breakout.

This breakout is with volume confirmation.

Can you see the volume confirmation here?

So mother and father.

Can you see volume confirmation the volume is more than the previous?

Attentively, we had law of the Bricktown, Kendall Stop-Loss at the height of the breakdown, Kendall.

Target, we cannot give this because we will not get proper relationship right, then what we will do

will check for previous.

What was the previous one?

There was a resistance.

This level.

Or you can keep this level, did the market achieve your target?

Yes.

Right.

So these were some of the examples for uptrend and downtrend, head and shoulders pattern.

OK, traders, I'm not trying to say the market will always go against you, but if you enter the trade

according to our strategy, you will have more pufferfish topless.

That time, what happens is you can always escape the trap when you enter early and your surpluses are

higher than what the market is expected to retries, then you have higher chances of staying in the

trade for a longer duration.

You just stay in a trade for a longer duration.

Obviously, you can achieve this kind of profits, right?

All we are trying to tell you is the old methods to not work anymore if the old methods do not work

anymore.

How can you expect to make profit in the stock market?

Hope this video was useful.

We suggest you to back test and make use of the strategy next time you come across.

Head and shoulders, pattern traders.

That's all for this lecture.

I'll see you on the next one.