What is Double Tops Chart Patterns?

Trading XAUUSD Identify a Double Tops Trading Pattern in XAUUSD Trading

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

Gold Patterns for Day Trading - Gold Patterns Tutorial

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

Double Tops xauusd price patterns commonly form on Gold Trading charts & this chart pattern analysis tutorial explains how to trade & analyze gold charts using Double Tops xauusd trading patterns.

Double Tops Chart Pattern

Double tops xauusd pattern is a reversal gold pattern which forms after an extended upwards 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 xauusd market
• We sell when the price breaks out below neck line point: see below for an explanation.

Double Top Pattern - What is Double Tops Chart Patterns?

The double tops chart pattern look like an M Shape, the best reversal gold signal is where the second top is lower than the first one as shown below, this means that the reversal gold signal can be confirmed by drawing a downward gold 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?