How to Oil Trade a Double Tops Crude Oil Trading Chart Pattern

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

Double Tops Crude Oil Trading Pattern

Double tops crude oil pattern is a reversal crude oil chart pattern that forms after an extended upwards oil trend.

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

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

The sell oil signal from this double tops crude oil chart pattern formation occurs when the crude oil market breaks-out below neck line.

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

However, double tops crude oil chart pattern is only confirmed once the neckline is broken & the crude oil market moves below the neckline.

Neck Line is just another name for the last support zone formed on the Oil Trading chart.

Summary:

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

Analysis of Double Tops Oil Trading Chart Pattern?

Double tops crude oil chart pattern look like an M-Shape pattern, the best reversal oil trading signal from the double top crude oil chart pattern is where the second top is lower than the first top as shown below:

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

How to Trade the Double Tops Crude Oil Trading Chart Pattern - How to Analyze a Double Tops Oil Trading Chart Pattern in Oil Trading