Head and Shoulders and Inverse Head and Shoulders Indicators for TradeStation

The head and shoulders indicator set is designed to identify head and shoulders and inverse head and shoulders (inverted head and shoulders) patterns within TradeStation and then to monitor the market as the pattern progresses.

The head and shoulders indicator looks to identify when the market makes a new relative high (left shoulder) followed by a pullback after which the market then rises even higher (head) before selling off again. This is followed by another lower high (right shoulder) before the market continues its downside trajectory. The opposite is true for an inverse head and shoulders pattern.

Traders can use our indicators to identify head and shoulders patterns as soon as the peaks/valleys of the pattern are formed prior to the neckline being breached, or wait until the market has broken through the neckline before taking action.

Our indicators can be used to identify patterns as they form either on a chart or to scan multiple markets simultaneously with the help of TradeStations RadarScreen or scanner. Once identified traders can then watch the pattern evolve and set alerts if they wish to be notified when the market has broken key levels.

The head and shoulders indicators also provide an opportunity for breakout traders seeking to identify areas of resistance as established by the head/right shoulder peaks of the pattern and looking to take advantage should the pattern fail and the market reverse.

Included within these indicators are a number of inputs allowing you to configure various aspects of the head and shoulders pattern including:

• The strength of the head and shoulder pivots and the size of the pattern itself.
• The position of the head between the left and right shoulders.
• The position of the shoulder peaks relative to the range of the indicator.
• The relationship between the left and right shoulders.
• The relationship between the left neck and the right neck pivots.
• The position and calculation of the neckline and breakout levels.
• The option to activate rules preventing the right neck from being higher than the left shoulder, or the right shoulder from being lower then the left neck.

The indicators can also be inserted into a TradeStation RadarScreen to scan the market and identify head and shoulder and inverse head and shoulder patterns as they setup and then monitor the market as the pattern evolves.

100% Money Back Guarantee
You can try these indicators for 30 days risk free and evaluate them for yourself within TradeStation. If after purchasing these indicators you decide they are not right for you just let us know within 30 days for a full refund.

Screenshots
The screenshot below shows the head and shoulders pattern identified in a TradeStation chart. A cyan dot is drawn on the left shoulder of the pattern, a red dot on the head peak and a yellow dot drawn on the right shoulder. To help highlight the pattern white dots are drawn at the left and right neck lows and a series of dots connect the two neck lows. After the pattern is detected dots are drawn bar by bar at the neckline price (orange) and the breakout level (gray).

The EURCAD chart example below shows a longer term head and shoulders pattern identified within the forex market prior to the market selling off.

The screenshot below shows a head and shoulders pattern which has formed over several weeks. In this example the indicator is set to override joining the two neck pivot points when drawing the neckline if doing so would result in a downward sloping neckline, instead opting to draw the neckline at the left neck pivot price. The indicators include the option to override both upward or downward sloping trendlines and to use the left or right, or highest or lowest, neck pivot prices instead.

The head and shoulders indicator can also be used as a breakout indicator to identify when markets breakout to new highs through a recent level of resistance set by the head or the right shoulder of the pattern. In the ABT chart below the breakout level is activated at the head of the pattern as shown by the gray dots and traders can be alerted as the market moves higher through the level of resistance set by the head peak. Where the breakout level is placed can be customized within the indicator.

The inverse head and shoulders indicator, displayed in the chart below, includes the same features and settings as the head and shoulders indicator with a view to identifying markets with the potential to rise.

The daily bar chart below shows a longer term inverse head and shoulders pattern forming over a period of a few months.

The indicators can also be used to find short term head and shoulders patterns, as shown in the screenshot below, for traders looking for a quicker return on investment.

Additional Information
The head and shoulders indicators include multiple settings for customizing the indicators. Traders can identify head and shoulders setups when they break through the neckline or alternatively they can be alerted earlier as soon as the three peaks of the pattern are formed.

When applied to a RadarScreen the head and shoulders indicators provide additional information.

• Bars Since - shows the number of bars since the pattern was detected counting from the peak of the right shoulder.
• Breakout - shows the price at which a breakout alert would be triggered and the head and shoulders pattern fail.
• Neckline - displays the neckline price.
• Monitor - calculates where the market is in relation to the neckline and breakout levels. A value of 0 or less means that prices are at or below the neckline while a value of 1 or higher means prices are trading at or above the breakout level.
• Text - displays a text message should the market reach the neckline, a breakout occur or the maximum number of bars permitted is reached.

The head and shoulders indicator applied to a RadarScreen.

The inverse head and shoulders indicators include all the same features as the regular head and shoulders indicators.

Standard Indicator Features

• Various inputs and settings to help customize and optimize each indicator.
• Can be applied within TradeStation using various tools, including charts, RadarScreens and scanner.
• Option to use TradeStation sound, message and email alerts.
• Includes PDF manual.

Delivery
You should expect to receive your order within 1 working day via email.

Continued Support and Updates for a Minimum of 12 Months
All our products include full support and updates for at least 1 year so if you have any problems or require any additional information you can contact us for assistance.

If you have any questions about this, or any other product we offer, please contact us.