Double Top AUDNZD
Double Top on the hourly chart. Investors can short trade after the break or place small trades, as double tops may have limited profit potential.
How to identify a double top:
Look for an Upswing: The price movement should be clearly in an uptrend prior to the creation of a double top. This indicates that the price has been making continuously higher highs and higher lows.
Find the Initial Peak: Determine the uptrend's first peak. The price has now risen to its maximum level before beginning to fall.
Find the Trough: Following the initial peak, the price will briefly fall. Find the valley or trough that develops following the initial peak.
Find the Second Peak: The price will then rise once more in an effort to hit a new high. But this second rally will fall short of the first peak's height and begin to collapse once more.
Verify the Pattern: To verify a double top pattern, make sure the decline that follows the second peak is lower than the trough that follows the first peak. This demonstrates that the previous resistance level was not successfully overcome by the price.
Draw the Neckline. Connect the low points of the two troughs with a horizontal line. This is the neckline, which denotes a level of support. It serves as an essential pattern reference.
Verify Double Top Pattern: To verify the double-top pattern, watch for a price break below the neckline. Breaking below the neckline might be interpreted as a sell signal because it portends a potential trend reversal.
All points relevant here
How to identify a double top:
Look for an Upswing: The price movement should be clearly in an uptrend prior to the creation of a double top. This indicates that the price has been making continuously higher highs and higher lows.
Find the Initial Peak: Determine the uptrend's first peak. The price has now risen to its maximum level before beginning to fall.
Find the Trough: Following the initial peak, the price will briefly fall. Find the valley or trough that develops following the initial peak.
Find the Second Peak: The price will then rise once more in an effort to hit a new high. But this second rally will fall short of the first peak's height and begin to collapse once more.
Verify the Pattern: To verify a double top pattern, make sure the decline that follows the second peak is lower than the trough that follows the first peak. This demonstrates that the previous resistance level was not successfully overcome by the price.
Draw the Neckline. Connect the low points of the two troughs with a horizontal line. This is the neckline, which denotes a level of support. It serves as an essential pattern reference.
Verify Double Top Pattern: To verify the double-top pattern, watch for a price break below the neckline. Breaking below the neckline might be interpreted as a sell signal because it portends a potential trend reversal.
All points relevant here
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