Now let’s take a look at chart #4. Even if you have closed the second half at nearest 1.27 level – you are absolutely happy. If you’ve caught some extension from the ABC pattern or even the 1.618 target from head swing – much better. Pipruit: Commander, but this is rearview example. It’s much easier to talk about it that in reality.Commander in Pips: This is one to talk! Sure it is. But I have to explain somehow important moments to you, right? If we assume that after your initial entry the market has erased the engulfing pattern and moved down – you’re in loss, that’s obvious. But this loss is very small, compared to the classical approach. Besides, I just want to show you what you want to watch for and how to manage position during H&S development. Applying this knowledge will allow you to have a position that is quite different from the public one. You will not be nervous during breakout and your stop loss will be in a quite a different place. Pipruit: You’re right with that, Sir. Commander in Pips: Ok, the last moment is if market shows a H&S failure and moves beyond the head extreme. In this case it is better to act aggressively, because, as we’ve said once failure patterns are even more powerful than direct patterns. They lead the public to panic and people do not know what to do with a failure pattern. Treat it as different pattern and act. You may wait for instance, for the nearest retracement after breakout of head level and enter. Trading of a failed pattern allows you to place a tight stop, because after the real failing, the market usually shows strong moves. Just look at left shoulder in our example – this is Double Bottom failure. Market has fell like a stone after that.