Double Top and Bottom Patterns. Predict Trend changes and act before Trends

Double Top and Double Bottom Pattern

Trends can not go on forever. They'll probably end up somewhere. Here are some formations that help us understand this ending. For example, we can look at the Double top (end of the bull trend) and Double bottom (end of the bear trend) formation.

DOUBLE TOP

Double Top

Double top occurs when the end of a strong uptrend is reached and is an important reversal pattern. At some point-overbought point when the price is rising rapidly, investors believe that the decline will begin and make their first sale. This creates the first reversal from the top and turns the price direction down. The price going down for a while weakens. At this time, investors enter the market with the expectation that there will be a rise again and the trend will continue, and the price returns to the upward direction. When it reaches a level close to the previous high, the sellers step in again and thus the second peak is formed. After that, the downward price moves up to the point where it fell before. The double top pattern is an important reversal pattern and it is thought that the uptrend will end and be replaced by the downtrend.

Double Top Pattern

DOUBLE BOTTOM

Double Bottom

It is a price chart formation that is seen on the double bottom price chart when the downtrend ends and the uptrend is started. At some point-oversold point as the price drops, investors believe the take-off will begin and make their first purchases. This creates a reversal from the first bottom and turns the price direction up. The price going up for a while weakens. At this time, investors enter the market with the expectation that there will be a decline again and the trend will continue, and the price turns to the downward direction again. When it reaches a level close to the previous low, the buyers are engaged again and thus the second low is formed. After that, the price moving upwards advances to the point where it was removed before. The double bottom pattern is an important reversal pattern and it is thought that the downtrend will end and be replaced by the uptrend.

Double Bottom Pattern

Watch the video on the topic 👉 Double Top and Double Bottom Patterns Video