What's Double Tops Chart Patterns in Forex?

How Do I Identify a Double Tops Trading Pattern in Forex ?

The Best Trading Patterns Tutorial for Beginner Traders - How to Identify and Trade Double Tops Chart Pattern

Chart Patterns for Day Trading - Trading Forex Patterns Cheat Sheet

This Double Tops patterns charts guide explains how to identify patterns - identifying chart patterns is the first step when it comes to learning how to trade with Double Tops chart patterns in Forex.

Double Tops forex trading price patterns commonly form on Forex charts and this chart pattern analysis guide explains how to trade & analyze forex charts using Double Tops forex trading chart patterns.

Double Top Chart Pattern

Double tops 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 & then penetrates lowest point between highs, called the neck line. The sell signal from this double top chart pattern formation occurs when the market breaks-out below neckline.

In Forex, this double top pattern formation is used as a early warning trading 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 the 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 - What is Double Tops Chart Patterns in Forex?

The double tops chart pattern look like an M Shape, the best reversal signal is where the second top is lower than the first one as shown below, this means that the reversal signal can be confirmed by drawing a downwards trend line as shown below. If a trader opens a sell signal the stop loss will be placed just above this downwards trend line.

M Shaped Double Tops Chart Pattern - What is Double Tops Chart Patterns in Forex?