H&S patterns give 3 types of entry signals.
1- Anticipatory. in the area of the 2nd shoulder high for as regular H&S,
low of a shoulder for
a rev H&S. For this entry, I will find with a variation of price action
techniques. It could be a pullback and touch of the descending
tops trendline from the head which is forming a mini bear flag or a
pullback to the sell zone aka Floor
Trader Method Often this is a MOF or slingshot
. They all say the same thing. So much of trading setups are
2- Momentum. At the break of the neckline. That
means at the break. If you hesitate waiting to see if it is going to work
out then your entry is later and you will have to hold through more of a
pullback if price retests the neckline. This is where many say bye bye. They get
in late get stopped on pullback then say "if only I held it"
3- Retracement/ Retest of neckline after break of neckline price comes back.
But sometimes price doesn't come back so I take the break or before that. For some the tendency is not
to take break and wait to see if it will work. Well, if price only moves 2 pts
from initial break of neckline then retraces to neck and does not reverse again
into trend they have a loser while I have a breakeven or smaller loser from a
neckline entry. Often if price moves +2 from initial neck break I will take a
partial then add back at the neck retest.
I like to enter at 1 and 2 and if it comes back and I have taken
partial profit again at 3.
Once in a trade on ES my target is 2 points usually for 1st part
of trade. So if target is 8 points away I will take partial profit at 2
points. I am unconcerned if it is a textbook H&S. I am looking for
a $100/contract partial trade which may then go further, hopefully to target. Experience with this setup tells me
it is profitable. While some may wait for the textbook H&S I am
trading and taking profit. If the trade fails and comes short of target fine. I still
have partial profits. I always give thanks after profit as well as loss knowing
in the long run I am a winner.