Trade Diary: Head & Shoulders Strategy

March 2, 2016

Over the next 4 weeks I’ll be demo trading a Head and Shoulders Forex strategy and providing regular updates. If the strategy turns out to be profitable, I will begin trading it on a live account.

The Strategy:

1. Identify Head and Shoulders topping patterns across major currency pairs on 30m, 1 hour and 4 hour charts

2. Short neckline breakouts*, with a stop loss above the right shoulder and a 1.5x risk take profit

3. Risk per trade will be 2% of account balance with only one simultaneous trade. Stop will be manually trailed to break even at 1:1

Forex Strategy: Head and Shoulders

I will be trading this strategy til the end of March on a Vantage FX RAW ECN demo account and assessing the results at the end of the period. I’ll use the ECN model over the standard, as tight spreads are essential when trading smaller time frames. At the end of the period; I’ll either scrap the strategy, make adjustments, or run it live (depending on success).

Before running the strategy live, I would like to see a profit factor of at least 1.5 (gross profit at least 150% of gross loss).

Whether your just starting out or an experienced Forex trader, I think this will be an interesting experiment to track. I will publish regular critical updates here and you can track my progress at myfxbook. If you have any questions, feel free to contact me via Twitter.


Oscar Goullet – @FXtechs

Risk Disclosure: In addition to the website disclaimer below, the material on this page prepared by Australian Forex broker Vantage FX Pty Ltd does not contain a record of our prices or solicitation to trade. All opinions, news, research, prices or other information is provided as general news and marketing communication – not as investment advice. Consequently any person acting on a Forex live account it does so entirely at their own risk. The experts writers express their personal opinions and will not assume any responsibility whatsoever for the actions of the reader. We always aim for maximum accuracy and timeliness, and Vantage FX on the MT4 platform, shall not be liable for any loss or damage, consequential or otherwise, which may arise from the use or reliance on this service and its content, inaccurate information or typos. No representation is being made that any results discussed within the report will be achieved, and past performance is not indicative of future performance.


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