Chart pattern · Reversal · Bearish
What is it, in one line
Three peaks, the middle one highest, both shoulders roughly level, joined by a rising or flat neckline.
Bearish · Reversal · verdict: Traditional claim, not yet measured here
Three peaks, the middle one highest, both shoulders roughly level, joined by a rising or flat neckline.
Method
Conventional target: A break below the neckline projects a decline roughly equal to the head-to-neckline distance.
Invalidated by: A close back above the neckline invalidates the pattern.
Of the three most recent confirmed swing highs the MIDDLE one (the head) stands at least minSepAtr above both neighbours, and the two shoulders sit within a tolerance band of each other. The neckline is the trough level between them.
The traditional claim
Read as a bearish reversal once price closes below the neckline.
How this detection is wrong
Requiring the shoulders to match is what stops this firing on any three descending peaks. Without it, every downtrend contains a head and shoulders.
Published so the count can be reproduced. Every figure below is a parameter of the rule, not a preference: change one and the occurrence count changes with it.
| Parameter | Meaning | Default |
|---|---|---|
| pivotLeft | bars to the left of a swing | 3 |
| pivotRight | bars to the right before a swing is confirmed | 3 |
| lookback | bars searched for the swings | 120 |
| atrPeriod | bars of ATR used to size everything below | 14 |
| flatTol | how level two points must be | 0.02 |
| minSepAtr | separation required between swings, in ATR | 1 |
These share enough geometry that a detector can return more than one of them on the same bar. The engine reports every match rather than picking a winner.
Every pair on the site that can be mistaken for another, and what separates each: the look-alikes index.
Of the three most recent confirmed swing highs the MIDDLE one (the head) stands at least minSepAtr above both neighbours, and the two shoulders sit within a tolerance band of each other. The neckline is the trough level between them. The detector also requires a prior uptrend, so the same shape in the wrong context is not counted.
It is read as bearish. Read as a bearish reversal once price closes below the neckline.
Requiring the shoulders to match is what stops this firing on any three descending peaks. Without it, every downtrend contains a head and shoulders.
As an executable rule over open, high, low and close, with 6 named parameters — including bars to the left of a swing 3, bars to the right before a swing is confirmed 3, bars searched for the swings 120 — all published on this page so the count can be reproduced. Strict and loose variants are defined as well, so the sensitivity of the count to those thresholds is visible rather than assumed.
Measurement pending re-run
No hit rate is published here yet. The run that would supply one was computed on engine ca6d9e36c81c; the engine is now cfb08765de7c. Its candlestick rows included the still-forming bar, and it predates the chart formations entirely, so those figures have been withdrawn rather than published with a caveat. The definition above is unaffected: it is what the detector tests, and no re-run changes it.
Same shape, opposite reading
The shapes are close, and the prior trend is what decides which one fired: this rule requires a preceding uptrend, its mirror a preceding downtrend.
Inverse Head and Shoulders: Three troughs, the middle one lowest, the outer two at approximately the same level.