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How to Trade Double Bottom and Top

No chart pattern is more common in trading than the double bottom or double top. In fact, this pattern appears so often that it alone may serve as proof positive that price action is not as wildly random as many academics claim. Price charts simply express trader sentiment and double tops and double bottoms represent a retesting of temporary extremes.

Although there can be variations, the classic Double Bottom Reversal usually marks an intermediate or long-term change in trend. Many potential Double Bottom Reversals can form along the way down, but until key resistance is broken, a reversal cannot be confirmed.

Entry when the price breaks through the neckline, Stop loss goes below the pattern . Profit target goes the same distance as the height of the pattern, up from the neckline

doublebot

The double top and double bottom are very common reversal chart patterns. The double top is a bearish pattern that occurs after an uptrend. This means that when you see the pattern you will then look for selling opportunities

Short trade initiated when the the price breaks through the neckline. The stop loss is placed above the double top The take profit is measured by taking the height of the actual pattern and extending that distance down from the neckline.

Doubletop example

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