Inverse Head & Shoulders

Inverse Head & Shoulders finds the classical three-trough bottom — head below both shoulders, neckline across the intervening rally highs — and manages it from formation through target — the inverse head and shoulders implemented in full for the library. Patterns build from swing pivots with S-H-S markers, and by default must terminate a genuine downtrend: the head has to print the lowest low of the lookback.

How to Trade the Inverse Head & Shoulders?

• Forming pattern: once the right shoulder is in place, the outline and dashed neckline appear — the anticipated entry some traders take, stop under the head.
• Neckline breakout: a firm close through the neckline — dashed while forming, solid once broken — confirms the reversal and prints the IH&S label; an optional filter demands breakout volume, or the full classical template.
• Retest: an R marks the first successful hold of the broken neckline from above — a common second entry.
• Measured target and stop: the head-to-neckline height projects upward from the break as a dotted level; a close below the right-shoulder low invalidates at any stage.

Inverse Head & Shoulders Settings

• Swing Length (default 10): pivot width for troughs and rally highs — larger values build cleaner, rarer patterns.
• Preceding Downtrend (default enabled) with Downtrend Lookback (default 100): the head must undercut this many bars.
• Min Head Depth % (default 15): how clearly the head must bottom below both shoulders, as a share of pattern height.
• Max Shoulder Imbalance % (default 100): tighten below 100 to enforce shoulder symmetry.
• Breakout Window (default 2): pattern widths allowed before a forming setup goes stale.
• Volume Filter (default Off) with Volume Average Length (default 20) and Breakout Volume Multiplier (default 1).
• Show Forming Patterns, Measured Target and Neckline Retests (all default enabled).

Frequently Asked Questions

How does it differ from the topping version?

Structurally it mirrors the Head & Shoulders detector, but the classical literature weights volume far more heavily at bottoms. The Full Template filter encodes that: a quieter decline into the head and a firmer rally off it.

Can the neckline slope?

Yes. It is drawn through the two rally highs wherever they sit, and every breakout, retest and stale-pattern check is evaluated against the line's value on that bar.

When does a forming pattern disappear?

A close below the right-shoulder low invalidates it. Otherwise a newer valid candidate replaces it, or the breakout window expires without a neckline break and the setup goes stale.