Trade Forex Trading

How to Analyze Double Tops Chart Pattern Reversal Chart Pattern

How to Read Double Tops Chart Pattern Reversal Setup

Double Top Strategy

Double top upward trend reversal trade strategy is a reversal setup which forms after an extended upwards trend. As its name implies, this reversal strategy is made up of two consecutive peaks that are roughly equal, with a slight trough in between.

Double top upward trend reversal strategy is considered complete once gold price makes the second peak and then penetrates the lowest point between the highs, called the neck-line. The sell signal from this upward trend reversal strategy occurs when the market breaks-out below neckline.

In XAUUSD, Double top upward trend reversal strategy is used as an early warning signal that a bullish upwards trend is ready to reverse.

However, Double top upward trend reversal strategy is only confirmed once the neckline is broken and the market moves below the neck-line. Neck line is just another name for the last support level formed on chart.

Summary:

  • Double top upward trend reversal strategy Forms after an extended move upwards
  • This Double tops upward trend reversal strategy formation indicates that there will be a reversal in trend
  • We sell when price breaks out below the neckline point: see below for an explanation.

How to Analyze Double Tops Gold Chart Setup Reversal Chart Pattern

Upwards Trend Reversal Strategy - Double Top Reversal Strategy

The double top look like an M Shape, the best reversal 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 downward trend-line as illustrated below.

How to Analyze Double Tops Chart Pattern Reversal Chart Setup

Double Tops Trend Reversal Signal Strategies Methods

How Do You Interpret Double Tops Chart Pattern Reversal Setup