Head and shoulders
Three peaks, one neckline — and a number that is a ruler, not a forecast.
Read a chart pattern as a named arrangement of swing points and levels, not a picture with an arrow on it. Identify a head and shoulders and its inverse from the swings, draw the neckline as the level it is, and say exactly which close completes the pattern. Work out the measured-move number, and explain why it is a convention for sizing a move rather than a price the market owes anybody.
5 chapters · 6 quiz questions · 12 terms · included with a plan
Otus, on this module
Head and shoulders is the pattern everybody has heard of and almost nobody reads correctly, because it is usually taught as a shape that "means" a fall. It does not mean anything until a bar closes through one line, and after that it means one precise thing about the past. This module is about that line, that close, and the number people hang on it.
The chapters
Each module ends with you doing what it taught — a written answer Otus reads, and a quiz.
- 01 · Read
A pattern is an arrangement you already know
Swing points and a level, named together — and the one close that completes them.
- 02 · Read
The neckline, and the number people hang on it
Drawing the neckline honestly, and why the measured move is a convention.
- 03 · Watch
Watch: Head and Shoulders
One minute, once it is public.
- 04 · Read
The inverse, and the questions that apply to both
The same arrangement upside down, and a checklist that works on either.
- 05 · Write
In your own words
Three sentences. Otus reads them.
- 06 · Quiz
Six questions
A wrong answer still pays. It costs the combo, not the XP.
12 terms this module defines
The same definitions Otus uses in the lessons. All of them are in the trading glossary.
- Chart pattern
- A named arrangement of swing points and levels. Shorthand for describing a chart, built entirely from parts that can be checked without the name.
- Candidate pattern
- A shape that could complete a pattern but has not yet closed through its defining line. Many candidates never complete, which is why naming one early is a prediction.
- Pattern completion
- The first close through a pattern's defining line, on the timeframe the pattern was drawn on. The event the name refers to. A wick through the line is not it.
- Reversal pattern
- A pattern that describes the end of a move — such as a head and shoulders after an advance. Without a prior move to reverse, the name has nothing to describe.
- Head and shoulders
- Three peaks, the middle one highest, with a neckline through the troughs between them. Structurally, an advance that printed a lower high and then closed through its last pullback lows.
- Inverse head and shoulders
- Three troughs, the middle one lowest, with a neckline through the peaks between them. The same description as the top, mirrored — completed only by a close above the neckline.
- Neckline
- The line through the troughs of a head and shoulders top, or the peaks of the inverse. A level like any other: drawn before the break, given width, judged on closes.
- Sloped neckline
- A neckline whose two anchor points sit at different prices. Normal on real charts — and the reason to draw it before the break, since a line that can tilt can be made to fit any close.
- Right shoulder
- The last peak of a head and shoulders top: a lower high. A close back above it is the usual line at which a reading of the completed pattern is wrong.
- Pattern height
- The distance from a pattern's extreme to its defining line — head to neckline, for example. A measurement of the pattern, not of anything after it.
- Measured move
- The convention of copying a pattern's height beyond the line it broke. A yardstick for describing the move afterwards; not a price the market is expected to reach.
- Convention, not forecast
- A number that cannot be wrong in either direction — short of it "fell short", past it "overshot" — is a measuring rule, and should be used as one.
Finishing it pays 150 XP and 3 keys on the game board, on top of what each chapter earns. XP measures what you learned — never what you earned. How levels work.
Education only. Nothing here is a recommendation to buy or sell anything; the school teaches reading charts, never predictions.
Start with lesson one.
The first modules, Otus as your tutor and the game board are free. No card needed.