What the lesson covers

1. 0:00Three lows, the middle one deepest. Everyone recognises the shape, which is part of the problem with it.
2. 0:06The shape. A low, a rally, a deeper low, another rally, then a third low well above the middle one. A line across the two rallies is the neckline.
3. 0:17Why it forms. The head is capitulation. The right shoulder is the same selling being attempted again and failing to get anywhere near as far.
4. 0:27The levels that matter. The neckline, the head, the right shoulder's low, and the vertical distance from head to neckline. The neckline slopes, so it has to be re-read.
5. 0:37Where it completes. A close above the neckline completes it. Below the right shoulder's low the pattern's one real claim has been falsified.
6. 0:48How often it follows through. Sixty-two to sixty-eight. The published numbers for this shape are the most inflated in the field, because the failures are never recorded as patterns.
7. 0:57The same shape failing. Here the right shoulder simply keeps going, takes out the head, and every part of the structure disappears at once.
8. 1:08The tells. A heavy right shoulder, a neckline sloping steeply down, or a right shoulder deeper than the left.
9. 1:18One claim carries this pattern: the third low does not reach the second.