What is a Double Top Chart Pattern? A double top is a reversal pattern that occurs at the peak of an upward trend and can mark the beginning of a downward trend.
How Do I Recognize a Double Top Chart Pattern?
A double top chart pattern occurs in four stages: 1. Price reaches a new high 2. The trend faces resistance and sells off to support. 3. The price begins to move back to resistance, but another sell off occurs, meeting support again. 4. The price falls below support, establishing a downward trend
What Does a Double Top Chart Pattern Symbolize?
A double top chart pattern can represent a tug of war between buyers and sellers. While buyers seek to push the contract, sellers resist the upward trend. When once again the top of the pattern isn't broken, The buyers start to back off, leading the sellers to call the shots and send the trend downward.
Be vigilant about volume in this scenario, as it is conceivable to surge once the contract is beneath support. This support level may now eventually be a new resistance level in the new trend.
Note that a similar chart pattern is the Big M, which has all the principles of a Double Top, but with much steeper moves. - 15224
How Do I Recognize a Double Top Chart Pattern?
A double top chart pattern occurs in four stages: 1. Price reaches a new high 2. The trend faces resistance and sells off to support. 3. The price begins to move back to resistance, but another sell off occurs, meeting support again. 4. The price falls below support, establishing a downward trend
What Does a Double Top Chart Pattern Symbolize?
A double top chart pattern can represent a tug of war between buyers and sellers. While buyers seek to push the contract, sellers resist the upward trend. When once again the top of the pattern isn't broken, The buyers start to back off, leading the sellers to call the shots and send the trend downward.
Be vigilant about volume in this scenario, as it is conceivable to surge once the contract is beneath support. This support level may now eventually be a new resistance level in the new trend.
Note that a similar chart pattern is the Big M, which has all the principles of a Double Top, but with much steeper moves. - 15224
About the Author:
Having and knowing the correct tools are essential for trading. This week, I'd like to encourage you, particularly if you are a day trader, to take a look at and Learn about the most common chart patterns, how to identify them, and what they may mean for your trading. Chart patterns include: Double Tops, Double Bottoms, Flags, Head and Shoulders Tops, Head and Shoulders Bottoms, and many more.
