The "head and shoulders" model.. Is it a real warning or an obvious trap?
- In the basics of technical analysis, this pattern is the nightmare that precedes a collapse. The chart looks perfect for a bearish scenario, and everyone sees the same lines, the same lower targets.
And here lies the dilemma: A golden rule in the markets says: "When everyone agrees on seeing one pattern, the market often fails to achieve it."
Market makers know well that individual traders (Retail) place "stop-loss" or "sell" orders directly below the neckline.
Therefore, these very clear shapes are often a "bear trap" (Bear Trap) to collect cheap liquidity before a resurgence, or to deceive the market with a false weakness.
Technical analysis is a great tool, but it becomes dangerous when we consider it a "definitive roadmap" instead of being a "tool for probabilities."
The lesson? Do not bet against the market based on a chart in a book, wait for price confirmation and do not jump the gun.
Join us.. Do you believe in the accuracy of these models in the crypto markets?$GT
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The "head and shoulders" model.. Is it a real warning or an obvious trap?
-
In the basics of technical analysis, this pattern is the nightmare that precedes a collapse. The chart looks perfect for a bearish scenario, and everyone sees the same lines, the same lower targets.
And here lies the dilemma:
A golden rule in the markets says: "When everyone agrees on seeing one pattern, the market often fails to achieve it."
Market makers know well that individual traders (Retail) place "stop-loss" or "sell" orders directly below the neckline.
Therefore, these very clear shapes are often a "bear trap" (Bear Trap) to collect cheap liquidity before a resurgence, or to deceive the market with a false weakness.
Technical analysis is a great tool, but it becomes dangerous when we consider it a "definitive roadmap" instead of being a "tool for probabilities."
The lesson?
Do not bet against the market based on a chart in a book, wait for price confirmation and do not jump the gun.
Join us.. Do you believe in the accuracy of these models in the crypto markets?$GT