Patterns › Inverse head and shoulders vs Head and shoulders
Look-alikes
Inverse head and shoulders vs Head and shoulders
They look alike, so beginners mix them up. Here is what each one means, and how often each one worked on real charts.
Inverse head and shoulders
Three lows with the middle one deepest, then a break above the neckline.
An inverse head and shoulders has three lows: a left shoulder, a deeper head, and a right shoulder at about the same depth as the left one. The line joining the peaks between the lows is the neckline, and it can slope. The pattern completes when price closes above the neckline. It shows sellers failed to make a new low after the head, and traders see it as a sign that a fall may be ending.
Calling an inverse head and shoulders before price closes above the neckline.
Head and shoulders
Three peaks with the middle one highest, then a break below the neckline.
A head and shoulders has three peaks: a left shoulder, a higher head, and a right shoulder at about the same height as the left one. The line joining the dips between the peaks is the neckline, and it can slope. The pattern completes when price closes below the neckline. It shows buyers failed to make a new high after the head, and traders see it as a warning that a rise may be ending.
Calling a head and shoulders before price closes below the neckline.
Real odds side by side
| Pattern | Found | Target first | Stop first | Went nowhere |
|---|---|---|---|---|
| Inverse head and shoulders | 2,095 | 38% | 55% | 6% |
| Head and shoulders | 1,905 | 38% | 55% | 7% |
Counted by the Trading Class research engine on real past candles: entry at the signal candle's close, target 1.5 × ATR(14), stop 1 × ATR(14), 12 candles to decide, a candle that touches both counts as the stop. How we count. Past data, not a forecast and not advice.