Forex Double Top Chart Pattern
The double top is considered to be a major reversal chart pattern after a strong up trending market. The trading pattern is formed by two tops that are almost similar in height with a neckline (temporary low) in between. The pattern is confirmed on a sustained break of the neckline.
Forex Double Top Chart Pattern Example (GBP/USD 4 Hour Chart)
Forex Double Top Trading Ideas
Conservative forex traders: wait for a sustained break of the neckline (breaking temporary support).
Aggressive forex traders: sell in the vicinity of the second top. Look for bearish reversal candlestick patterns to enter a low risk – high reward trade with stop loss placed above the second top.