Thursday, April 9, 2009

Double top

A double top is a reversal pattern .This pattern occurs following an uptrend. It is named for the two of peaks which form when price is unable to make a new high. Traders get the sell or short signal when price breaks below the reaction low which formed between the two peaks.
The characteristics, volume pattern and measuring rules are similar to that of the head and shoulders except for there being only two peaks.
Ideally, the double top would have two peaks at about the same price level with volume being heavier on the first peak and lighter on the second.

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