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 Tops Trading Pattern

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

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

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

Summary:

• Double tops chart pattern forms after an extended move upwards
• This double top 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?