Difference between double top and double bottom
The double top and double bottom pattern is a technical analysis charting pattern that is used to predict reversals in the market. The pattern is created when there are two consecutive highs or lows that are approximately equal in value. The double top pattern is created when there are two consecutive highs and the double bottom pattern is created when there are two consecutive lows.
What is double top pattern?
A double top is a reversal pattern that is formed after there is an extended move up. In the chart above you can see that two peaks or “tops” were formed after a strong move up. This is a strong sign that a reversal is going to occur because it is telling us that the buying pressure is just about finished.
The double top and double bottom pattern is a reliable reversal pattern that can be used to trade both long and short positions. The pattern is created when the market makes two consecutive highs or lows that are approximately equal in value. The pattern is considered to be complete when the market breaks below the neckline for a double top or above the support line for a double bottom.
What is double bottom pattern?
The double bottom is also a trend reversal formation, but this time we are looking to go long instead of short. These formations occur after extended downtrends when two valleys or “bottoms” have been formed. This is a sign that the selling pressure is about finished, and that a reversal is about to occur.
The double top and double bottom patterns can be used to trade both long and short positions. The pattern is created when the market makes two consecutive highs or lows that are approximately equal in value. The pattern is considered to be complete when the market breaks below the neckline.
