Inverse Head & Shoulders Chart Pattern — How to Spot and Trade It

Three troughs: a lower middle trough (head) between two higher troughs.

In plain words

Digging three holes — the middle is deepest — then climbing out for good.

What the classic books say

The Inverse Head & Shoulders is a reversal pattern with reference reliability High and illustrative behaviour of ~70% after a confirmed neckline break (the kind of statistics catalogued in Bulkowski's encyclopedic pattern studies and Murphy's technical-analysis classic). Highly reliable bottoming pattern when fully formed.

Level by level

Beginner

Sellers tried three times; the middle was deepest, but they failed and buyers took over.

Intermediate

A failed lower low (head) followed by a higher trough signals supply exhaustion; the neckline break confirms.

Advanced

A classic accumulation bottom; neckline break with volume and a successful retest validate the reversal.

Trade plan (educational template)

• Entry: On a close above the neckline.
• Stop-loss: Below the right shoulder.
• Target: Head-to-neckline height projected up from the neckline.
• Check the numbers with the Risk-Reward calculator before any entry.

Common beginner mistakes

• Anticipating the break
• Skipping volume confirmation

Practise it now

• ▶ Draw the Inverse Head & Shoulders with live trendlines and a ghost forecast
• 📖 Full lesson in the Learning Hub

_Educational content only — not financial advice. Historical behaviour never guarantees future results._