HALF HEAD Trading Guide

The Half-Head Pattern indicator is a custom structural overlay designed to identify a specific reversal setup. It detects a local peak (the "Head"), monitors for a price dip that confirms a neckline, and then formally triggers a Sell signal when the price bounces to form a lower high (the "Right Shoulder") and subsequently breaks below the established neckline. It is optimized for catching clean tops and early trend reversals.

What does the indicator show?

• Pattern Markers: Automatically labels the "HEAD" (local high) and "LH" (Lower High / Right Shoulder) directly on the chart when the pattern forms.
• Neckline: A dotted line drawn from the lowest point of the dip following the Head. This serves as the trigger level for the pattern.
• SELL Signal: A prominent text marker plotting exactly where the price breaks the neckline, confirming the Half-Head breakdown.
• SL/TP Lines: Automatically draws the recommended Stop Loss (at the Head) and Take Profit (1:1 risk-to-reward projection) horizontal lines once the trade is active.

Key Settings

• EMA Fast, Slow, Trend: Configures the moving averages used internally to validate the dip and bounce dynamics of the pattern (defaulting to 5, 13, and 50).
• Pivot Lookback: Specifies how many bars left and right are required to confirm the Head and Right Shoulder pivot points.
• EMA 5 > EMA 50 Check: A safety filter that invalidates the bearish pattern if the short-term momentum (EMA 5) falls below the macro trend (EMA 50) prematurely.
• Only Last Trade: When enabled, visual clutter is reduced by only displaying the pattern and trade lines for the most recently detected setup.

How to use Strategy Parameters (Condition Source)

Within the Strategy Tester module, you can leverage the data from this indicator to create powerful logical conditions for trade entries and exits.

1. Breakdown Signals

The primary execution trigger for the Half-Head pattern.

• Half-Head Sell — Triggers strictly on the candle where the price breaks the neckline and confirms the pattern.

Strategy Example: Because the indicator looks for very specific structural anomalies, you can use Half-Head Sell is True as a standalone entry condition for Short trades, confident that the underlying Head and Shoulder structure has been validated.

2. Risk Management Levels

Using the indicator's automatically calculated trade plan.

• Stop Loss — The price value of the Head, acting as the structural invalidation point.
• Take Profit — The projected 1:1 reward target based on the distance between the Head and the Neckline.

Strategy Example: If automating your exits via the Strategy Builder, set your exit conditions to trigger when Price crosses above Stop Loss or Price crosses below Take Profit.