Once you understand the pattern, you’ll grasp part of multiple time frames! Your FX life will dramatically change with just 5,000 yen. Series [Basic] Eye-opening! Understand the patterns in FX 10 minutes to understand FX ⑥ = Technical =

In the previous discussion about target measurement, we mentioned that it is difficult to use on its own, and this pattern is similar to that.

However, by combining target measurement with patterns, you will likely gain insights such as, "Ah, this is how certain behaviors occur."

For those learning patterns for the first time, we will list the names of several patterns.

Double top, triple top, double bottom, triple bottom — these four are representative.

Additionally, the terms head-and-shoulders and inverted head-and-shoulders are also used for triple tops and triple bottoms.

But when treated as patterns, even if they are simply upside-down or right-side up, their functionality and the basis of their behavior are completely different.

Regarding the downward trend, the basis and information between bottoms based on cycle theory are central, and the presence or absence of a verdict that the wave has been pressed or broken at half its value will determine whether there is a sense of reversal.

In that sense, the concept of a neck can be weak material at the bottom.

Conversely, at the top, information about the neck tends to elicit a very strong reaction.

Those who have already learned bottoming, target measurement, and other concepts will likely grasp this point easily this time.

Now, let’s proceed to the discussion.

Please look at the diagram on the top left.

The precondition for the pattern is a situation that suggests a reversal in which the trend does not continue. If the ascending moves are continuing as in the top left diagram, that is NG.

At the same time, what you should check is that the shape matches the between-left-shoulder and top peak of Pattern A of a head-and-shoulders pattern.

You can recognize that it has become a peak only when the fact that the right shoulder has been lower is confirmed, as shown by the orange line.

An important point here is that, as the right shoulder is lowered, the confirmation of an entry-ready upside as a reversal indicator becomes a visual clue of crowd psychology.

After that is confirmed, the orange circle indicates entering based on some reversal material.

Also, at that time, the pattern splits into two matching patterns.

The peak of the top and the lower peak of the right shoulder correspond to a double top.

The strength of the neck causes the rebound points to deviate between Pattern A and Pattern B of the head-and-shoulders.

Also, as a take-profit point when entering at the orange circle, if the wave’s half-value has not been pressed, there is an expectation up to the half-value of the wave, and if there is no such expectation, the return to double the range to the target measurement works as a virtual target.

Well, how about it? Do you understand what the grounds are for why this learning point would be true simply from these materials?

Probably you would find it difficult.

On the other hand, for those who have already learned the bottom, neck, and target measurement, the content should be quite easy to understand.

It seems to be a prime example of how understanding changes with your level of learning.

However, this pattern also actually varies in reliability depending on medium-term moving average behavior.

For that, please see Eyes Wide Open! 10 Minutes to Understand FX9 Moving Averages, Ichimoku Kinko Hyo, Bollinger Bands, Fractals.

If you’re just pointing out one material here for now, set SMA60 (simple moving average period 60) on the chart you have at hand and check whether the following conditions are met at reversal.

If the current trend is an uptrend or a downtrend (strictly judged by the moving average’s perfect order plus the Ichimoku’s lagging span breaking well outside, etc.), is there a candle that has broken to the opposite side relative to the trend, and has the next candle also followed in the same direction?

That’s all there is to it.

Whether these conditions exist or not affects whether traders watching medium-term or longer moving averages can be drawn into the truth of the matter.

Moreover, this is not only about the current time frame but also about tracking two lower time frames to see if both show the same pattern, which yields a stronger reaction.

Thus, the overlap of the same conditions supports the behavior of multi-time-frame analysis.

In practice, when the SMA60-following candle appears, in most cases the most recent low serves as support or the most recent high serves as resistance can be easily confirmed.

Thus, finding just one such material can significantly raise the likelihood of making judgments.

And when the SMA60-following candle exists, the indication of a reversal is higher, so the pattern tends to work well; conversely, if this condition is absent, the trend’s continuation is suspected, or the reversal signals are weak, leading to range-bound conditions where you may be misled when trading.

Looking at it this way, you’ll realize that being “tricked” is directly linked to missing some material you should recognize.

And many such materials are rarely discussed in videos or blogs, including the details.

Ultimately, it’s important to cultivate the ability to notice small errors by training yourself to recognize them.

Our series exists to sharpen those sensors.

Thank you for your continued support.

Now, let us review once again.

The precondition for the pattern is a situation that suggests a reversal in which the trend does not continue. If the ascending moves are continuing as in the top left diagram, that is NG.

At the same time, what you should check is that the shape matches the between-left-shoulder and top peak of Pattern A of a head-and-shoulders pattern.

You can recognize that it has become a peak only when the fact that the right shoulder has been lower is confirmed, as shown by the orange line.

An important point here is that, as the right shoulder is lowered, the confirmation of an entry-ready upside as a reversal indicator becomes a visual clue of crowd psychology.

After that is confirmed, the orange circle indicates entering based on some reversal material.

Also, at that time, the pattern splits into two matching patterns.

The peak of the top and the lower peak of the right shoulder correspond to a double top.

The strength of the neck causes the rebound points to deviate between Pattern A and Pattern B of the head-and-shoulders.

Also, as a take-profit point when entering at the orange circle, if the wave’s half-value has not been pressed, there is an expectation up to the half-value of the wave, and if there is no such expectation, the return to the range measured target by doubling the distance tends to function as a virtual target.

Once you have three or more pieces of material aligned, you will understand that there are times when you can read the market through such combinations as in this example.

In any case, the goal is not to cram everything into your head with text, but to repeatedly output while tracking the market in real time to see if it conforms, so please make sure you don’t feel satisfied after just reading once and gaining knowledge.

At least, allow 2–3 minutes to think about and track each chart reading.

That accumulation will greatly change your FX life.

With that, we will conclude this lesson for now. See you next time.