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The Double Top Pattern

The double top pattern: is a reversal pattern that comes at the end of the uptrend. It has two peaks in one level.

Forming the pattern: before the end of the uptrend, the seller enters forcefully, causing the price to fall forming the first top, and the buyer returns in attempt to regain control of the market and return the uptrend.

The buyer failed to penetrate the last top that was formed by the seller, who in turn re-entered again to drop the price and succeeded in breaking the last bottom ( the neck line) and the safety rope for the buyer to raise the surrender flag and leave the scene for the seller to change the trend from uptrend to bottom trend.

How to trade on it: entry is made (sell) after breaking the neck line and closing below it . The distance between the neck line and the last top is measured and dropped below the neck line and it would be the target of the pattern and the half of it would be the (stop loss).

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