📗 Educational Post :
Double Tops
The double-top pattern is another type of reversal pattern that has two peaks at about the same level. These are the highest peaks reached after an uptrend, where prices find strong resistance. Double-top patterns signal a reversal from an uptrend to a downtrend.
When prices are rallying higher in an uptrend, they reach the first top (peak) and then retrace slightly to find a support level before bouncing back up.
Prices are unable to rise higher than the first peak and find strong resistance at the price level reached by the first peak. Subsequently, prices fall back down. After testing the resistance level for the second time, prices fall back down and penetrate the neckline. This is when we have the double top pattern and the reversal in the trend is confirmed.
Just below the breakout point, you have the opportunity to enter a sell position.
