on the structure the rounded bottom will vary in size and magnitude. Their function, then, is to determine the highest probability for a point of failure. Thank you for reading! Those who have a fader mentality - who love to fight the tape, sell into strength and buy weakness - will try to anticipate the pattern by stepping in front of the price move. Dont make this deadly mistake when trading the Double Top chart pattern.
Double Bottom Chart Pattern Strategy - Trading Strategy Guides
Trading Double Tops And Double Bottoms - Investopedia
Double Bottom Definition - Investopedia
Double tops often lead to a bearish reversal in which traders can profit from selling the stock on a downtrend. Rounding tops can often be an indicator for a bearish reversal as they often occur after an extended bullish rally. The net effect is a series of frustrating stops out of positions that often would have turned out to be successful trades. Should I wait for confirmation first? The reversal is composed by two consecutive bottoms with approximately the same equal lows. If we project the same price distance to the downside we obtain our first take profit zone for the strategy. The tops are peaks which are formed when the price hits a certain level that cant be broken.