Trading double tops and double bottoms for a living

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How to trade double tops and double bottoms. Learn the criteria that you need to trade double tops and bottoms. Look out for price to reach a significant support and resistance level. Watch price action as price decides which way to turn at this level. Will it go through and power onwards, or reverse?

Very often at support and resistance price will try to continue in the original direction. If it fails twice then we have a double top or double bottom.

As the market makes the second high or low watch for rejection here. This is the footprint of the institutional trader entering the market. This could mean that prices are going to reverse.

Where congestion takes place in the middle of the double top or bottom then learn to be cautious. There is probably a battle going on between the bulls and the bears. We want to avoid getting trapped in these type of battles. Learn to be selective with your trades. Look for white space to develop between the middle of the pattern and the possible trade entry as price passes the middle of the pattern on its way out.

In a double top and where the second top is higher than the first then look for confirmation of the trade in the form of a momentum indicator divergence.

Watch how price action moves in relation to the moving averages and watch for the moving averages to be broken in favour of your trade before committing.

We provide the theory and some examples in trading double tops and double bottoms.

If you are serious about trading for a living then check out our trading training course. It is online and you can go ahead and start today.