I see a possible reverse head and shoulders pattern on my chart. The right shoulder looks like it is finishing.
Should I wait for a breakout above the neckline? I entered too early last time and it didn’t go as planned.
Confirm neckline break with volume spike above 1.5x average.
• Entry: after close above neckline
• Stop: below right shoulder
• Target: head-to-neckline distance
Pattern fails 30% of time without volume confirmation.
Three months ago I jumped into what looked like a perfect reverse head and shoulders on GBP/USD. The pattern was textbook but I got greedy and entered before the neckline break.
It dropped 15% more and stopped me out. That loss taught me patience the hard way.
Now I always wait for that clean break with decent volume behind it.
Volume check helps avoid bad trades. Always wait for the clear break.
Waiting for the neckline breakout is usually the safer play here. That pattern can fail if you jump in too early.
Check the volume when it breaks above the neckline. Strong volume makes the breakout more reliable in my experience.
The target is typically the distance from the head to neckline projected upward from the breakout point.