Replies to post #138136 on Simple's Green Room

[pennies2007]

Ahhh, I see what's happened. But the TDI head and shoulders (or IHS) and price action head and shoulders (or IHS) behaves a bit differently.

Once the neckline breaks on the TDI IHS, the price has to come back down to retest the neckline. During that test, price has to make a lower low overall. On top of that, price also has to make 3 lower lows at each shoulder and the head. So, in order to be valid, the first low on UJ would be at the left shoulder. The next lower low in price would be at the head. The 3rd lower low would be at the right shoulder. Then, we'd see a neckline break and a retest which would give us a final low on price.

I've never seen a valid TDI head and shoulders or TDI IHS where the price didn't make 3 consecutive highs or 3 consecutive lows before the neckline broke. UJ doesn't fit the mold on this one for a valid TDI pattern.

Here's an example of a correctly aligned TDI IHS pattern on a GU daily chart from a while back. A lot of times, the TDI may look like it's forming the pattern but unless price action matches, the pattern isn't valid.