Head And Shoulders

Head and Shoulders Pattern

Reliable reversal pattern signaling the end of an uptrend (or downtrend for inverse).

Pattern Structure

H&S (Bearish Reversal)

1. Left Shoulder — Rally to new high, pullback
2. Head — Higher high than left shoulder, pullback
3. Right Shoulder — Lower high than head, starts to drop
4. Neckline — Connect the two pullback lows

Inverse H&S (Bullish Reversal)

1. Left Shoulder — Drop to new low, bounce
2. Head — Lower low, bounce
3. Right Shoulder — Higher low, starts to rise
4. Neckline — Connect the two bounce highs

| Criteria | Requirement | |----------|-------------| | Volume | Decreasing on right shoulder | | Symmetry | Shoulders roughly equal height | | Prior trend | Must have existing trend to reverse |

Workflow

1. Get Exact Data

get_candles_around_date(symbol=, exchange=, interval=, date=)

2. Mark Structure Points (3 parallel highlight calls)

draw_chart_analysis(action="create", drawing={
    "type": "highlight",
    "points": [{"time": , "price": }],
    "options": {"text": "LS"}
})

draw_chart_analysis(action="create", drawing={
    "type": "highlight",
    "points": [{"time": , "price": }],
    "options": {"text": "Head"}
})

draw_chart_analysis(action="create", drawing={
    "type": "highlight",
    "points": [{"time": , "price": }],
    "options": {"text": "RS"}
})

3. Draw Neckline

draw_chart_analysis(action="create", drawing={
    "type": "support",
    "points": [
        {"time": , "price": },
        {"time": , "price": }
    ],
    "options": {"text": "Neckline"}
})

For inverse H&S, use "resistance" instead of "support".

4. Enter

Standard: Enter on neckline break + close with volume. Stop above right shoulder. Preferred: Wait for neckline break, then retest. Enter on rejection. Tighter stop. Target: Head-to-neckline distance projected from break point.

Key Rules

• NEVER trade before neckline break — pattern incomplete until confirmed
• NEVER ignore volume: declining volume on right shoulder validates weakness
• Must have a prior trend to reverse; H&S in a range is invalid
• Right shoulder failure (doesn't reach LS height) strengthens bearish case

Related Skills

• double-top-bottom — Similar reversal family
• multi-timeframe-analysis — HTF H&S signals major reversals

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: SKE-Labs
• Source: SKE-Labs/agent-trading-skills
• License: Apache-2.0

Install and usage instructions live in the source repository linked above.