How Do I Differentiate a Double Bottom Chart Pattern from a Double Top Chart Pattern?

XAUUSD Trading Differentiate a Double Bottom Chart Pattern from a Double Top Chart Pattern

Trading XAUUSD Identify and Trade Double Bottoms Chart Pattern and Double Tops Chart Pattern

A double top trading pattern has an M shape and it occurs at a gold market top hence its name double top chart pattern and it signals a bearish xauusd price reversal in the gold market. Once a double top chart pattern is confirmed then the xauusd market will be considered to be bearish, therefore a double tops is bearish.

A double bottoms chart pattern has a W shape and it occurs at a gold market bottom hence its name double bottom chart pattern and it signals a bullish xauusd price reversal in the gold market. Once a double bottom chart pattern is confirmed then the xauusd market will be considered to be bullish, therefore a double bottoms is bullish.

To identify double top & double bottom chart patterns the example below explain the 2 xauusd trading patterns:

Double Tops Chart Pattern

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

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

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

Summary:

• Double tops xauusd chart pattern forms after an extended move upwards
• This double top pattern formation indicates that there will be a reversal in the gold market
• We sell when the price breaks out below neckline: see below for explanation.

Double Top Chart Pattern - How Can I Differentiate a Double Bottom from a Double Top?

Double Bottoms Chart Pattern

Double bottoms xauusd pattern is a reversal gold pattern which forms after an extended downwards xauusd trend. Double bottoms xauusd pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak between.

This double bottoms pattern formation is considered complete once xauusd price makes second low and then penetrates the highest point between lows, called the neck line. Buy indication from this bottoming out signal occurs when the xauusd market breaks-out the neckline to the upside.

In Gold, this double bottom pattern formation is an early warning signal that the bearish Gold trend is about to reverse. It is only considered complete/completed once the neck-line is broken. In this double bottoms chart pattern formation the neck line is resistance level for xauusd price. Once this resistance is broken the xauusd market will move up.

Summary:

• Double bottoms xauusd chart pattern forms after an extended move downward
• This Double bottoms xauusd pattern formation indicates that there will be a reversal in the xauusd market
• We buy when price breaks out above neck line: see below for the explanation.

Double Bottoms Pattern - How Can I Differentiate a Double Bottom from a Double Tops?

Gold Trading Differentiate a Double Bottom Chart Pattern from a Double Top Chart Pattern