How To Trade Double Tops Chart Patterns

Описание: In this educational video I will teach you how to use the double top chart pattern in your trading. I’ll cover the variation of the double top chart pattern, the story behind its formation. and how to trade it successfully.

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The double top pattern happens when the market hits a resistance level, then retraces a bit, followed by a second attempt to continue the trend. a double top pattern indicates buyer’s failure to push the market upwards .

What is the story behind the double top chart pattern’s formation?

The double top chart pattern shows the weakness of the trend, because buyers hits the resistance, level, they fail to breakout up through it, price retraced back, another attempt to break up through the resistance, But no way, buyers got rejected again .

So what’s happening is that we ‘ve got that lack of confidence coming in . buyers starts taking profits, because they say , look we hit resistance for the first time, we did not make it through , we made another attempts , we did not make it through so they get scared and then start closing gradually their buying positions .

Sellers notice that the market is no more up trending, and buyers lost control, so they enter gradually and attempt to take control. This is why we see a transition from an uptrend to a downtrend.

This chart pattern is confirmed when the neckline is broken, when this support level is broken, we can say that this is a real double top chart pattern, and we can predict a trend reversal.

The variation of the double top chart pattern:

There are some variations that happen with the double top, so let me show you a couple of variations, there’s actually three ways that the double top chart pattern could occur.

-The double top matching highs: it is a double top that has the same high points.

A double with a higher high: this double top has a higher high and it might look like this right here.

-A double top with a lower high : it is called a leaning double top because if you draw a line down there , you realize that that resistance is actually leaning .

How to trade the double top chart pattern?

There is no good or bad way of trading, it all depends on your personality and your trading style, In my experience there are three ways of trading the double top chart pattern .

The conservative strategy

-The aggressive strategy

-The risk taking strategy

There is no bad or good way of trading this chart pattern .it all depends on your personality and your trading style.

Please leave a comment below if you liked my video about the double top chart patterns and let me know what do you want to learn more ?