DOUBLE TOP AND DOUBLE BOTTOM PATTERNS
DOUBLE TOP PATTERN:
First we have our moving uptrend... price them makes two same highs
Top makes a resistance level
Psychology behind it (price action standpoint): price failed to make a higher high but
instead made a same high which shows a loss of momentum from the uptrend, and from
the buyers in the market
DOUBLE BOTTOM PATTERN:
First, we have our moving downtrend... then price makes two same lows making it as
support level
Price action standpoint behind it: price failed to make new lower low which shows a loss of
momentum from downtrend. And form sellers in the market
Best ways to use double top and double bottom pattern
1. Double top or bottom neckline break entry:
2. DOUBLE TOP OR BOTTOM + NECKLINE BREAK + PULLBACK
ENTRY:
Another example
Another example:
ANOTHER EXAMPLE:
and
And we also have an inverse head and shoulder pattern here
And
We can also interpret this as a slanted neckline
3. DOUBLE TOP OR BOTTOM PATTERN AAT KEY LEVEL:
DIFFERENT TYPES OF ENTRIES FORM TRADERS:
Some would enter long trade at the reversal point shown above (entry point 1)
Some would enter at the reversal point shown above (entry point 2)
Others will place trend line like shown above and enter at the breakout
Pattern traders enter here
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There are multiple entry points
4. AGGRESSIVE EARLY ENTRY AT THE “2ND
REVERSAL POINT”:
If you wait for the neckline break up here, you are getting in very late and missed a lot of the
move upwards
Instead we can enter at the 2nd reversal point this is known as the early aggressive entry...
Cuz, we have two touch points before 2 nd reversal so still it will be a very quality trade
But still, we need a price action... so
Example:
5. CANDLESTICKS AT KEYLEVEL + DOUBLE TOP OR
DOUBLE BOTTOM INSIDE:
Now what we should do is to look inside of this candle stick price action area
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Now let’s move on to the triple top and triple bottom pattern
TRIPLE TOP AND TRIPLE BOTTOM PATTERN
Another example:
