Head & Shoulders
Background
Head and shoulders is one of the best-known reversal patterns: three peaks in a row, with a higher middle peak (the head) flanked by two lower ones (the shoulders) and a roughly level "neckline" through the troughs between them. A break below the neckline is read as the uptrend running out of steam. The upside-down version, with three troughs, is an inverse head and shoulders and signals the opposite.
This scanner finds these patterns on your chart using the settings below. For the scriptable version, see FindHeadAndShoulders.
Parameters
| Parameter | Description |
|---|---|
| Trend Size | The amount in percent a price has to move to be counted as a pivot point. |
| Distance Threshold | Is the maximum percentage distance between the two shoulders for the current pattern to be counted. If this value is too high the pattern found will be squashed looking and have lower probability of success. |