Pattern Analysis & Scoring System
This chapter analyzes Head & Shoulders (H&S) and Inverted H&S (iH&S) trades to identify correlations between pattern characteristics and win rate, then provides a scoring system for pre-trade evaluation.
Caveat: Sample Size
Warning: This analysis is based on approximately 10 trades. Results are preliminary and should be refined as more trade data becomes available. Use this as a starting framework, not gospel.
Trade Data Summary
| # | Instrument | Pattern | Outcome | LS Depth | RS Depth | LS-RS Sym | Neckline Tilt | Width Sym | Sentiment |
|---|---|---|---|---|---|---|---|---|---|
| L1 | EURGBP | QH&S | Loss | 96.8% | 94.1% | 2.7% | 18.0% | 1.64 | Against |
| L2 | GBPJPY | iH&S | Loss | — | — | — | — | — | Against |
| L3 | AUDHKD | H&S | Win | — | — | — | — | — | Neutral |
| NT1 | HKDJPY | iH&S | Win | 78.7% | 90.4% | 11.7% | 41.8% | 0.73 | Neutral |
| NT2 | XAUHKD | H&S | Loss | 66.4% | 84.0% | 17.7% | 24.0% | 0.63 | Neutral |
| NT3 | XAUJPY | H&S | Win | 79.6% | 86.2% | 6.6% | 10.3% | 1.47 | Mixed |
| NT4 | CHFJPY | QH&S | Win | 77.3% | 70.6% | 6.7% | 28.1% | 0.74 | Neutral |
| NT9 | NZD/HKD | H&S | Win | 91.6% | 84.1% | 7.5% | 27.7% | — | Bullish |
L = Live trades, NT = Not Taken (tracked but not executed)
Analysis by Metric
Shoulder Depth
Theory: Textbook H&S patterns have shoulders at ~50% of the head depth. Shallower shoulders may indicate weaker reversal conviction.
Findings:
- Wins: 78.7%, 79.6%, 77.3%, 91.6% (avg ~82%)
- Losses: 96.8%, 66.4% (avg ~82%)
Conclusion: No significant difference observed. Most shoulders in our sample are 70-90% deep regardless of outcome. The 50% textbook ideal may not apply to real-world trading, or sample size is too small. Not a reliable filter yet.
Shoulder Symmetry (LS vs RS Depth Difference)
Theory: More symmetrical shoulders indicate a cleaner pattern. Lower percentage = more symmetrical.
Findings:
- Wins: 11.7%, 6.6%, 6.7%, 7.5% (avg ~8%)
- Losses: 2.7%, 17.7% (avg ~10%)
Conclusion: Winners have slightly better symmetry on average. However, the best symmetry (2.7%) was a loss, and 11.7% was a win. Weak signal - needs more data.
Neckline Tilt
Theory: Flatter necklines are more reliable. Steep necklines suggest the pattern may be part of a continuing trend rather than a reversal.
Findings:
- Wins: 41.8%, 10.3%, 28.1%, 27.7% (avg ~27%)
- Losses: 18.0%, 24.0% (avg ~21%)
Conclusion: Counter-intuitive result - losses had FLATTER necklines on average. This contradicts theory but sample is tiny. Inconclusive - possibly inverted correlation or noise.
Width Symmetry
Theory: The pattern should be roughly symmetrical in time (left side ≈ right side). Ratio of 1.0 is perfect; 0.6-1.4 is acceptable range.
Findings:
- Wins: 0.73, 1.47, 0.74 (avg ~0.98)
- Losses: 1.64, 0.63 (avg ~1.14)
Conclusion: Winners are closer to symmetrical on average. Loss patterns show more extreme asymmetry. Moderate signal - stay within 0.6-1.4 range.
Sentiment Alignment
Theory: Trading with or neutral to market sentiment improves win rate. Trading against sentiment increases risk.
Findings:
- Wins: Neutral (3), Mixed (1), Bullish (1) - aligned or neutral
- Losses: Against (2), Neutral (1) - two of three traded against sentiment
Conclusion: STRONGEST SIGNAL in this dataset. Both "Against" sentiment trades were losses. Trading against sentiment appears to be a significant risk factor.
Pre-Trade Scoring System (v2)
A psychological decision-support tool for evaluating H&S trades BEFORE entry. Score setups objectively to compare quality and avoid emotional decisions.
Data Sources
From H&S Tool Screenshot (7 points):
- Run-up start - Bottom of prior move (iH&S) / Top of prior move (H&S)
- Left Shoulder (LS) - Price + bar
- Left Neckline (LN) - Price + bar
- Head - Price + bar
- Right Neckline (RN) - Price + bar
- Right Shoulder (RS) - Price + bar
- Entry candle - Bottom (long) / Top (short) + bar
From OANDA MCP:
- Candle OHLC data for ATR calculations
- Break candle and entry candle ranges
From User:
- Instrument, timeframe
- Screenshot link
- RSI divergence (yes/no)
- Roadblock zone (none/1/2/3)
- Break candle bar number
- Sentiment
Calculated Metrics
From Pattern Points:
- Shoulder Symmetry = |LS_depth% - RS_depth%|
- Width Symmetry = (RS_bar - Head_bar) / (Head_bar - LS_bar)
- Run-up Ratio = Run-up Size / Head Height
From OANDA:
- ATR(14) = Average True Range of 14 candles before entry
- Break Candle ATRs = Break candle range / ATR
- Entry Candle ATRs = Entry candle range / ATR
Scoring Criteria
| Criterion | Points | Condition |
|---|---|---|
| Sentiment | +1 | Aligned or Neutral |
| RSI Divergence | +1 | Present |
| Shoulder Symmetry | +1 | < 15% difference |
| Width Symmetry | +1 | Ratio 0.6 - 1.4 |
| Break/Close Candle | +1 | ≥ 1.0 ATR |
| Entry Candle | +1 | ≥ 0.5 ATR |
| Roadblock | +1 to -2 | None=+1, Zone3=0, Zone2=-1, Zone1=-2 |
| Run-up Ratio | +1 to -1 | ≥1.5=+1, 1.0-1.5=0, <1.0=-1 |
Score Range: -3 to +8
Grade Definitions
| Grade | Score | Action |
|---|---|---|
| A | 6-8 | Strong setup - take it |
| B | 4-5 | Acceptable - proceed with caution |
| C | 2-3 | Weak - probably skip |
| D | ≤1 | Do not trade |
Pre-Trade Checklist
Before entering any H&S trade, complete this checklist:
Step 1: Pattern Quality
- Sentiment aligned or neutral? (+1 if yes)
- RSI divergence present? (+1 if yes)
- Shoulder symmetry < 15%? (+1 if yes)
- Width symmetry 0.6-1.4? (+1 if yes)
Step 2: Momentum Check
- Break candle ≥ 1.0 ATR? (+1 if yes)
- Entry candle ≥ 0.5 ATR? (+1 if yes)
Step 3: Roadblock Assessment
- No roadblocks in path to TP? (+1)
- Only Zone 3 roadblock? (0)
- Zone 2 roadblock? (-1)
- Zone 1 roadblock? (-2)
Step 4: Run-up Context
- Run-up ratio ≥ 1.5? (+1)
- Run-up ratio 1.0-1.5? (0)
- Run-up ratio < 1.0? (-1)
Step 5: Calculate & Decide
Total Score: _____ / 8
| Your Score | Grade | Decision |
|---|---|---|
| 6-8 | A | Take the trade |
| 4-5 | B | Proceed with caution |
| 2-3 | C | Skip this one |
| ≤1 | D | Do not trade |
Example Evaluation
Trade: GBPUSD H1 iH&S Long
| Criterion | Value | Points |
|---|---|---|
| Sentiment | Neutral | +1 |
| RSI Divergence | Yes | +1 |
| Shoulder Symmetry | 8% | +1 |
| Width Symmetry | 0.85 | +1 |
| Break Candle | 1.3 ATR | +1 |
| Entry Candle | 0.6 ATR | +1 |
| Roadblock | None | +1 |
| Run-up Ratio | 1.8x | +1 |
| Total | 8 (A-grade) |
Decision: Strong setup - take the trade.
Summary
Key Findings:
- Sentiment is critical - Avoid trading against sentiment
- Width symmetry matters - Keep ratio between 0.6-1.4
- Shoulder symmetry helps - Prefer <15% difference
- Shoulder depth - Not a reliable filter (most are 70-90% anyway)
- Neckline tilt - Inconclusive, needs more data
Recommendation: Score every H&S setup before entry using the v2 checklist. Only take A-grade (6-8 points) or B-grade (4-5 points) trades.
Last updated: February 2026 Sample size: ~10 trades Version: 2.0 - Pre-Trade Scoring Checklist