Basic Chart Patterns - Double Top and Double Bottom

Basic Chart Patterns: Double Top & Double Bottom

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Basic Chart Patterns : Double Top & Double Bottom

On popular demand a new series of posts has been started in the area technical analysis which would be covering basic chart patterns.

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This is the first post of the series in which you are going to learn the complete details about the double top and double bottom pattern such as the formation, identification and trading strategies of these chart patterns.

 

Basic Chart Patterns - Double Top & Double Bottom

 

Double Top Chart Pattern

The double top is a bearish reversal pattern that is formed after an uptrend. It is a good indication that prices are likely to reverse alerting traders to potential selling opportunities. It is made up of two highs of equal or similar heigh giving the appearance of letter M on your chart. Price is trying to break higher on two attempts each time finding resistance before reversing to the downside.

The base of the pattern is known as the neckline, when price breaks the neckline, the pattern in qualified.

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