Double Top Pattern: How to Spot Market Reversals ๐ฏ
Looking for a simple, proven way to catch market tops before they dump? The double top pattern is one of the most reliable signals that a trend about to reverse.
๐ A double top forms when price tries and fails to break the same resistance level twice. The first push up gets rejected, price pulls back, and then a second attempt fails again โ forming two peaks. Between them is a neckline (support level). If price breaks below that neckline, the pattern is confirmed.
This is a bearish reversal signal. It usually appears after an extended uptrend and marks the potential beginning of a downtrend ๐ฝ
Hereโs how to trade it:
1๏ธโฃWait for the price to clearly form two tops near the same level.
2๏ธโฃIdentify the neckline โ the lowest point between the two peaks.
3๏ธโฃWait for a confirmed break below the neckline before entering a short.
4๏ธโฃSet your stop above the second top.
5๏ธโฃYour profit target = the distance between the tops and the neckline, projected downward.
Extra confirmation: a spike in volume on the breakdown helps validate the move.
๐ค Itโs a simple, visual pattern โ but if you use it with discipline and wait for confirmation, it can become one of your strongest tools in spotting trend reversals.
#FAQ #educational $BTC
