What is Double Top chart pattern and Double bottom chart pattern

 

What is Double Top Chart pattern or Double bottom Chart pattern?

Double Bottom Chart Pattern

A double Bottom Chart pattern is also known as "W" pattern because in this pattern the candle made in the chart is an English Alphabet W-word type pattern. This pattern also indicates the bullish Trend of stock or index in the market.

Now let's talk About how this pattern works.

•  In this pattern there will be "W" kind of pattern is made in the chart. In this pattern first, A big red candle was made in a chart.
• After that, it will take support and again bounce back to the upward direction. After that, it will again make resistance.
• Then it will fall again towards the support or near support. And then it will again take a reversal toward the resistance.

How to take trade in this pattern

• After that, you will draw a breakout point similar to the image and when it breaks the level then enter in next candle and put stop loss in the previous breakout candle wig side (downside).
• You can select the target according to your wish or you can also take the target according to the gap between support and resistance as shown in diagram.

Double Top chart Pattern

A double top chart pattern is also known as M Pattern Because in this pattern the candles were made English Alphabet "M" word type pattern. The pattern also helps to know the Bears trend of the market this is one of the best trading patterns. Which helps treader to short sell in the market.

This pattern Indicates that there should be a bear move coming in the stock or Index. It is the opposite of Double Bottom Pattern.

Now let's talk About how this pattern works.

•  In this pattern there will be "M" kind of pattern is made in the chart. In this pattern first, A Green candle or bullish move was made in a chart.
• After that, it will take resistance and bounce back downward as shown in the image.
• Then again it will take support and reverse back to near resistance levels.
• After this Again the candle chart will go down and after this confirmation, there will be a high probability of the bear's trend will continue and you will get a nice opportunity for short sell in stocks or to take a nice trade-in Put option segment. 

 How to take trade in this pattern?

• In this pattern, you should enter after the breakout of resistance when the breakout done after that you will enter in next candle.
• And your stop loss will be the wig of the breakout candle. Now how to take target of trade.
• You can take target according to your risk-reward ratio or The gap between "M" will be the target according to your wish.

For more Detail about this pattern, you can watch this Youtube video.

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