Head and Shoulders Top

Three peaks with the middle one highest above a near-horizontal neckline, after a rise; completes on a close below the neckline.

The head and shoulders top is the classical reversal pattern of Edwards & Magee: a left shoulder high, a higher head, and a right shoulder at roughly the left shoulder's height, joined underneath by a neckline through the two reaction lows.

The right-shoulder high negates the pattern; Bulkowski finds a throwback to the neckline after about half of breakdowns.

How we define it

Swings of at least 2 ATR: shoulder, low, head, low, shoulder; the pattern follows a rise
Neckline: the two lows within 3% of each other (near-horizontal), tested at least twice; no close below it before the breakdown
Head at least 3.5 ATR above the neckline and clearly above both shoulders; shoulders at 40-85% of the head height and within 35% of each other
Minimum length: 2 months on 1D, 3 months on 1W, 10 days on 4H
Breakout (up) / breakdown (down): the first candle close beyond the boundary by at least 3% on 1D and 1W (1.5% on 4H)
Failed breaks: a breakout or breakdown that closes back inside the boundary within 6 candles on 4H, 5 on 1D or 3 on 1W is removed from the list
Trend filter: breakouts only above the 200-period EMA (40-week EMA on 1W), breakdowns only below it
Watchlist: the pattern is complete but unbroken and price is within 3% (or 1 ATR, at most 6%) of the boundary