📚 Trading 101 | What is the Double Top Pattern and How Can It Help You Spot Trend Reversals?

The Double Top is one of the most well-known reversal patterns in technical analysis. Its shape is simple but powerful—it features two consecutive peaks at similar price levels, separated by a moderate pullback. This pattern often forms at the end of an uptrend and signals a potential bearish reversal. 👇

🔍 How to identify it?

1. 📈 Price rises to form a first peak, then pulls back.

2. 📈 Price rises again to a second peak, around the same level as the first.

3. 📉 Price fails to break above the previous high and drops again, breaking the neckline (support level between both troughs).

4. ❗ The pattern is confirmed when price breaks the neckline with volume—triggering a bearish move.

💡 Why is it useful?

Because it reflects a loss of bullish momentum. Buyers are losing strength, and sellers are starting to dominate. It’s especially common in crypto charts, particularly in the 4H and daily timeframes.

🎯 Classic strategy:

• Enter a short position after the neckline break.

• Target: Measure the height from the tops to the neckline and project it downward from the breakout point.

• Always use a stop-loss above the second top to protect against false breakouts.

✅ While no pattern is perfect, combining the Double Top with volume indicators, RSI, or moving averages increases accuracy and improves decision-making.

Mastering this pattern can help you avoid traps and spot trend reversals like a pro. It’s a must-have in every serious trader’s toolbox. 🔧📉

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