Head and shoulders
You will learn to
- The five swings
- Sloped necklines
- Why the most famous pattern failed the test
The shape
Left shoulder, a higher head, a right shoulder near the left one's height. The neckline joins the two lows between them and may slope. A close through it confirms; the measured move is the head's height below the neckline. The inverse version marks bottoms.
Reading it
The right shoulder is where the trend visibly fails: buyers could not get back to the head's high. A neckline sloping down (for a top) is weaker — price has to fall further before it breaks, and the shape is closer to a downtrend already under way.
What our backtest found
4H, unseen 2024–26: head & shoulders −0.02R (76 trades), inverse +0.17R (55) — the most famous pattern had no edge on its own here. It is still part of the combined pattern result, which is positive.Advertisement
Check yourself
1. In a head and shoulders top, what shows buyers failing?
- The head
- The right shoulder lower than the head ✓
- The left shoulder
The rally after the head could not make a new high.
2. What did our backtest find for head & shoulders alone?
- A strong edge
- No edge on its own ✓
- It always fails
−0.02R on 76 trades; inverse +0.17R on 55 — not significant.
Terms in this lesson
- Head and shoulders
- Shoulder, higher head, shoulder; inverse at bottoms.
Practise it on real charts. In the app, this lesson comes with real examples (reveal what happened next), a graded drill and the track test. Open the Academy in NexusCore — free →