Trading Double Tops and Double Bottoms Stock Indices Strategies

A Stock Indices trader should wait for the stock index price to turn in the opposite direction after touching one of the stock indices Bollinger bands before considering that a stock indices reversal is happening.

Even better a stock indices trader should see the stock index price cross over the moving average.

Double Bottoms Stock Indices Trend Reversals

A double bottom is a buy stock indices signal setup. Double tops occurs when stock index price action penetrates the lower Bollinger band then rebounds forming the first stock index price low, then after a while another stock index price low is formed, and this time it is above the lower Bollinger band.

The second stock index price low must not be lower than the first one and it important is that the second stock index price low does not touch or penetrate the lower Bollinger band. This bullish stock index trading setup is confirmed when the stock index price action moves and closes above the middle band (simple moving average).

Double Bottoms - Bollinger Bands Stock Indices Trend Reversals Trading Strategy Using Double Bottoms Stock Index Chart Patterns

Double Tops Stock Indices Trend Reversals

A double top is a sell stock indices signal setup. Double tops occurs when stock index price action penetrates the upper Bollinger band then rebounds down forming the first stock index price high., then after a while another stock index price high is formed, and this time it is below the upper Bollinger band.

The second stock index price high must not be higher than the first one and it important is that the second stock index price high does not touch or penetrate the upper Bollinger band. This bearish stock index trading setup is confirmed when the stock index price action moves and closes below the middle band (simple moving average).

Double Tops - Bollinger Bands Stock Indices Trend Reversals Trading Strategy Using Double Tops Stock Index Chart Patterns