Is a Double Tops Chart Pattern Bullish or Bearish?

A double top chart pattern has an M shape and it occurs at a market top hence its name double top chart pattern and it signals a bearish price reversal in the forex market.

Once a double top chart pattern is confirmed then the market will be considered to be bearish, therefore a double tops is bearish.

Double Top Trading Pattern

Double tops forex pattern is a reversal pattern which forms after an extended uptrend. As its name implies, this double tops trading pattern formation is made up of two consecutive peaks which are roughly equal, with a moderate trough between.

This double top pattern formation is considered complete once price makes the second peak & then penetrates the lowest point between the highs, called the neck-line. The sell signal from this double top pattern formation occurs when market breaks-out below the neckline.

In Forex, this double top pattern formation is used as a early warning trading signal that a bullish trend is about to reverse. However, double top chart pattern is only completed once the neck line is broken and market moves below the neckline. Neckline is just another name for last support level formed on Forex chart.

Summary:

• Double tops chart pattern forms after an extended move upwards
• This double tops pattern formation indicates that there will be a reversal in market
• We sell when price breaks below the neckline: see below for explanation.

Double Top Chart Pattern - Is a Double Tops Pattern Bullish or Bearish?