Concept
Head & Shoulders
Head & Shoulders are Chart & Candlestick Patterns concepts. The Library holds 2 implementations, each one a working definition you can pull into Quant.
Top Head & Shoulders indicators
2 total
What is a Head & Shoulders?
A head and shoulders is the classic three-peak reversal pattern of Western charting, codified in the Schabacker and Edwards & Magee lineage. An uptrend makes a peak (the left shoulder), a higher peak (the head), then a lower peak (the right shoulder), and a neckline is drawn across the two lows between them. The right shoulder's lower high is the tell: the trend has stopped making higher highs, the failure that sets up a change of character in modern structure vocabulary. The pattern completes only when price closes through the neckline; before that it is a possibility, not a signal.
The inverse head and shoulders is the mirror at bottoms. In the classic description volume fades across the head and right shoulder and expands on the neckline break, and the measure rule projects the head-to-neckline distance from the break as an objective.
How traders use it
- As a reversal entry: short the neckline break, or wait for the frequent retest of the broken neckline from below, with the stop above the right shoulder.
- As a target framework: the pattern's height projected from the neckline gives a measured objective, treated as a scenario or scale-out level rather than a promise.
- As a warning for trend followers: a developing right shoulder that cannot exceed the head is a cue to tighten stops on longs even before the neckline gives way.
Related concepts · Reversal chart patterns
Concept family
Chart & Candlestick Patterns
84 concepts mapped · 46 in the Library
Head & Shoulders FAQ
How do you calculate a head and shoulders price target?
Measure the vertical distance from the top of the head to the neckline directly below it, then project that distance downward from the point where price breaks the neckline (upward for an inverse pattern). That is the conventional measure-rule objective. It is a guideline, not a guarantee: price frequently stops short or overshoots, so most traders reconcile it with nearby support before relying on it.
What invalidates a head and shoulders pattern?
Before completion, a rally that takes out the head cancels the topping structure. After a neckline break, the common invalidation is price reclaiming the neckline and holding above it, or pushing back above the right shoulder, which converts the setup into a failed break. Failed head and shoulders patterns can squeeze sharply the other way, which is why stops typically sit above the right shoulder.
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