The double top pattern is a popular technical analysis tool used in forex trading. This widely recognized pattern often signals a potential reversal or pause in an upward trending market. By understanding the behavior of the double top pattern, traders have the potential to make informed decisions when it comes to protecting profits and minimizing losses. In this article we’ll highlight the components of the double top pattern, how to identify it, and provide some real-world examples of successful trades. The double top pattern is a commonly used chart formation in technical analysis. This pattern forms when the price of a security reaches a high level twice within a short period of time. After reaching the high point twice, the price of the security falls back and fails to rise above the previous high. The double top pattern is considered a bearish signal, as it suggests that the uptrend of the security may have ended and a downward trend may be about to begin. The double top is used as a chance for traders to enter a short trade in the security.
Double top pattern in technical analysis: A Guide to Forex Trading
By Matthew M. Lockett Nov 18, 2023