{"id":9628,"date":"2022-10-12T08:24:03","date_gmt":"2022-10-12T08:24:03","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9628"},"modified":"2022-10-12T08:24:03","modified_gmt":"2022-10-12T08:24:03","slug":"how-to-trade-double-tops-and-double-bottoms","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/12\/how-to-trade-double-tops-and-double-bottoms\/","title":{"rendered":"How to Trade Double Tops and Double Bottoms"},"content":{"rendered":"\n

When a double top or double bottom chart pattern appears, a trend reversal<\/strong> has begun.<\/p>\n\n\n\n

Let\u2019s learn how to identify these chart patterns and trade them.<\/p>\n\n\n\n

Double Top<\/h2>\n\n\n\n

A\u00a0double top\u00a0is a reversal pattern that is formed after there is an extended move up.<\/p>\n\n\n\n

The \u201ctops\u201d are peaks that are formed when the price hits a certain level that can\u2019t be broken.<\/p>\n\n\n\n

After hitting this level, the price will bounce off it slightly, but then return back to test the level again.<\/p>\n\n\n\n

If the price bounces off of that level again, then you have a DOUBLE top!<\/em><\/p>\n\n\n\n

\"Double<\/figure>\n\n\n\n

In the chart above you can see that two peaks or \u201ctops\u201d were formed after a strong move up.<\/p>\n\n\n\n

Notice how the second top was not able to break the high of the first top.<\/p>\n\n\n\n

This is a strong sign that a reversal is going to occur because it is telling us that the buying pressure is just about finished.<\/p>\n\n\n\n

With the double top, we would place our entry order below the neckline because we are anticipating a reversal of the uptrend.<\/p>\n\n\n\n

\"Double<\/figure>\n\n\n\n

Wow! We must be psychic or something because we always seem to be right!<\/p>\n\n\n\n

Looking at the chart you can see that the price breaks the neckline and makes a nice move down.<\/p>\n\n\n\n

Remember that double tops are a trend reversal formation so you\u2019ll want to look for these after there is a strong uptrend.<\/p>\n\n\n\n

You\u2019ll also notice that the drop is approximately the same height as the double top formation.<\/p>\n\n\n\n

Keep that in mind because that\u2019ll be useful in setting profit targets.<\/p>\n\n\n\n

Double Bottom<\/h2>\n\n\n\n
\"Huge<\/figure>\n\n\n\n

The\u00a0double bottom\u00a0is also a trend reversal formation, but this time we are looking to go long instead of short.<\/p>\n\n\n\n

These formations occur after extended downtrends when two valleys or \u201cbottoms\u201d have been formed.<\/p>\n\n\n\n

\"Double<\/a><\/figure>\n\n\n\n

You can see from the chart above that after the previous downtrend, the price formed two valleys because it wasn\u2019t able to go below a certain level.<\/p>\n\n\n\n

Notice how the second bottom wasn\u2019t able to significantly break the first bottom.<\/p>\n\n\n\n

This is a sign that the selling pressure is about finished, and that a reversal is about to occur.<\/p>\n\n\n\n

\"Double<\/figure>\n\n\n\n

Will you look at that!<\/p>\n\n\n\n

The price broke the neckline and made a nice move up.<\/p>\n\n\n\n

See how the price jumped by almost the same height as that of the double bottom formation?<\/p>\n\n\n\n

Remember, just like double tops, double bottoms are also trend reversal<\/strong> formations.<\/p>\n\n\n\n

You\u2019ll want to look for these after a strong downtrend.<\/p>\n","protected":false},"excerpt":{"rendered":"

When a double top or double bottom chart pattern appears, a trend reversal has begun. Let\u2019s learn how to identify these chart patterns and trade them. Double Top A\u00a0double top\u00a0is a reversal pattern that is formed after there is an extended move up. The \u201ctops\u201d are peaks that are formed when the price hits a certain level […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[807],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9628"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9628"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9628\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}