Double top and double bottom
Double top and double bottom are reversal
Double top
The double top is a frequent
The double top pattern shows that
The time between the two peaks is also a determining factor for the existence of a double top pattern. If the tops appear at the same level but are very close in time, then the probability is high that they are part of the consolidation and the trend will resume.
Volume is another indicator for interpreting this formation. Price reaches the first peak on increased volume then falls down the valley with low volume. Another attempt on the rally up to the second peak should be on a lower volume.
Double bottom
A double bottom is the end formation in a declining market. It is identical to the double top, except for the inverse relationship in price. The pattern is formed by two price
Most of the rules that are associated with double top formation also apply to the double bottom pattern. Volume should show a marked increase on the rally up while prices are flat at the second bottom.[citation needed]
References
- investopedia.com. Retrieved 30 January 2015.
- ^ "Double Bottom Reversal". Stock Charts. School. 9 June 2014. Retrieved 6 September 2016.