Reversal Patterns- Failures

[Shantanu]

Some of the patterns that are supposed to be quite good at predicting a reversal, e.g. Head and Shoulders, occasionally fail and one starts scratching one’s head with disbelief. (Almost always lots of bets are placed on such patterns, and scratching head is the only entertainment left due to the empty purse.) One of the main reasons for such failures is often simple, the averages are not aligned for the pattern to succeed. So while there are many ways of ensuring supporting evidence – such as volumes etc.:- averages confirming the pattern is a very important criterion to look for.