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Double top is one in which we can find two eqivalent tops in 1 month with relatively high volume.
Conditions:
Volume at second top or breaking point must be relatively high
Duration between 2 tops must be 20 days.
Short poistion must be created below breaking point
Double top follows Dow theory to derive demand and supply position.
conditions to determine bearish trend are
two equivalent tops
volumes at the second top should be high
duration between the two tops should be 20 days
short positions can be created below previous low
Double top is one of the most common reversal pattern used for checking the reversal of a bullish trend.
Conditions
Two consecutive tops at about dame price level
Volume is very high in the first top(peak) and light on the second
Minimum 25 days between the two tops
A double top is formed by 2 equivalent, not necessarily equal highs formed consecutively for atleast a period of 1 month gap. It shows sufficient selling pressure at the zone. When the price again reaches the zone, and there is a high volume day resulting in lower prices is an indication of bearish trend and that it is difficult to break the price barrier.
Double Top: It is one of the price patterns. It follows the base of Dow theory, the demand and supply. Two equivalent tops are called as double top.
Conditions to determine the bearish trend:
- Identify 2 equivalent tops in the chart
- Duration between the equivalent tops – Min 1 month
- Volume should be high at second top or while crossing neck
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