How to Trade the Double Tops Chart Pattern

To interpret the double tops chart patterns a trader needs to first learn about the technical analysis of double tops chart patterns explained below.

Double Top Chart Pattern

Double tops commodities pattern is a reversal chart pattern that is formed after an extended upward commodities trend.

As its name implies, this double tops chart pattern formation is made up of two consecutive peaks on the commodity chart that are roughly equal, with a moderate trough in between the 2 peaks.

Double tops commodities pattern formation is considered complete once commodity price makes the second peak and then penetrates the lowest point between the highs, called the neckline.

The sell signal from this double top pattern formation occurs when the commodities trading market breaks below neck-line.

In Commodity Trading, this double tops chart pattern is used as a early warning signal that a bullish Commodity Trading trend is about to reverse.

However, double top pattern is only confirmed once the neck line is broken & the commodities trading market moves below neck-line.

Neck Line is just another name for the last support level formed on the Commodity Trading chart.

Summary:

• Double tops commodities pattern forms after an extended move upward - upward commodity trend
• This double tops chart pattern signal indicates that there will be a reversal in commodities trading market trend
• We sell when price breaks-out below the neck-line: as described on the commodities trading example shown below.

Analysis of Double Top Pattern?

Double tops commodities chart pattern look like an M Shape pattern, the best reversal commodity signal from the double top chart pattern is where second top is lower than the first top as illustrated and shown below:

This means that the reversal commodity signal can be confirmed by drawing a downward commodity trend line as shown below. If a trader opens a sell commodity trade using this double tops reversal commodity signal the stop loss will be placed just above this downwards trend line.

How to Trade the Double Tops Chart Pattern - How Do I Analyze a Double Tops Chart Pattern in Commodity Trading