Double top patterns are most commonly
seen chart patterns in bar, line and candlestick charts. As the name suggest
double tops will have two peaks at almost same price levels.
Features:
- Bearish reversal signals:
Double tops are indication that the
uptrend is going to change its direction.
- Formed during an uptrend:
Double tops
can be seen in an uptrend.
- Easy recognition:
Double tops also called as ‘M’
patterns can be easily identified by the M shape formed by the pattern.
Formation:
Double tops are formed when in
following steps: