Double Tops Reversal Strategy

Double Top Strategy

Double tops up-wards trend reversal strategy is a reversal pattern which forms after an extended up-ward trend. As its name implies, this reversal strategy is made up of two consecutive peaks that are roughly equal, with a moderate trough between.

Double tops up-wards trend reversal strategy is considered complete once price makes the second peak & then penetrates the lowest point between the highs, called the neckline. The sell signal from this up trend reversal strategy occurs when the market breaks-out below the neckline.

In Indices, Double tops up-wards trend reversal strategy is used as a early warning signal that a bullish up-wards trend is about to reverse.

However, Double tops up-ward trend reversal strategy is only confirmed once the neckline is broken and trading market moves below the neck line. Neckline is just another name for last support level formed on chart.

Summary:

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

Up Indices 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 portrayed on the example explained and illustrated below, this means that the reversal signal can be confirmed by drawing a downwards trendline as shown below.

Double Top Indices Trend Reversal Indices Strategies Methods