How the Double Top Pattern Works
The double top pattern is a twin-peak chart pattern representing a bearish reversal in which the price reaches the same levels twice with a small decline in between the two peaks. A double top pattern usually signals an intermediate or long-term change in trend. When identifying the pattern, traders need to understand that the peaks and troughs don’t have to form a perfect M shape for the pattern to emerge. top 10 trading platforms Before the pattern starts to emerge, there is a considerable uptrend spanning across many months. The first top is the highest value the trend has reached during the current trend. After the first top, there is usually a price recession of 10 to 20%. This decline in asset value is generally insignificant; however, the fall can sometimes be prolonged due to a decrease in demand.The movement towards the second peak usually takes place with a low volume . falling wedge breakout Once the value reaches the first peak level, it resists moving upwards. ...