How Can You Tell a XAUUSD Double Tops Chart Pattern?
How to Trade Double Tops Setup
A double top pattern setup is a reversal chart setup used to analyze when the price direction might reverse and start moving in the opposite direction.
A double top reversal chart setup occurs at the top of an upward trend and double top chart pattern signals that the upward trend might reverse and start moving in the opposite direction.
To identify a double tops chart pattern traders will need to look for two consecutive tops that occur after an extended upward trend.
The two consecutive tops are what form the pattern known as double tops chart patterns
To trade a double tops chart pattern traders will wait til the gold price closes below the neckline of this double tops chart pattern and after gold price closes below the neckline of the double tops reversal chart setup then the reversal signal will be confirmed and traders can open sell trades using this double tops reversal trading pattern.
Double Top Reversal Setup
Double top upward trend reversal pattern setup is a reversal chart setup which forms after an extended upward trend. As its name implies, this reversal pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough between.
Double top upward trend reversal chart setup is considered complete once gold price makes the second peak and then penetrates the lowest point between the highs, called the neckline. The sell signal from this upward trend reversal chart setup occurs when the price breaks out below the neckline.
In XAUUSD, Double top upward trend reversal chart setup is used as an early warning signal that an upward trend is ready to reverse.
However, Double top upward trend reversal pattern is only confirmed once the neckline is broken & the gold price moves below the neck-line. Neck-line is just another name for the last support level formed on the gold chart.
Summary: double tops reversal pattern
- Double top upward trend reversal chart setup Forms after an extended move upward
- This Double tops reversal chart setup upward trend reversal strategy formation indicates that there will be a reversal in market
- Sell when price breaks out below the neckline of the double tops reversal trading pattern.
How Can You Tell a Double Top? - How Can You Tell a XAUUSD Double Tops Setup?
The double top look like an M Shape, the best reversal chart setup signal is where the second top is lower than the first one as displayed on the examples displayed below, this means that the reversal signal can be confirmed by drawing a downwards trend line as shown on the gold example illustrated below.
Trade Double Tops - How to Trade Double Tops Setup?
How Can You Tell a Double Top? - How Can You Tell a XAUUSD Double Tops Pattern? - How to Identify Double Top Pattern in Gold - How to Trade Double Tops - How to Trade Double Tops Setup?
