Double Bottoms Tops Profiteering

Steve Sollheiser
www.UniversalTradingProfits.com

The double top is a popular chart pattern that is responsible to most of trend
reversals. It is also called the 'M' pattern, as its shape resembles the letter M. It is
the most popular chart pattern of all, and appears in most FOREX pairs,
Commodities and Stocks. It is also the easiest pattern to spot and trade.

You may have heard about this pattern – I encourage you to forget all you have
learned. You will learn here the most solid and profitable method of trading the
Double Top, and I encourage you not to trade it in any other method as it is the
most consistent one.

Hit Rate: 82%. After pullback 82% of the trades reach the projected target.

Appearance: The double top is created when price touches the same Resistance
level twice. Simply put, price touches the same price level twice, unable to break
through it. Price may create a support level between the two tops – called the
neckline.

Eventually, price breaks downwards and a bearish trend begins.

Examples of Double Tops:

Universal Trading Profits ®

www.trader-tools.info
Most Wanted Expert Advisor and Trading system
For any Updates contact email:
Cs.Tradershop@gmail.com
Universal Trading Profits ®

www.trader-tools.info
Most Wanted Expert Advisor and Trading system
For any Updates contact email:
Cs.Tradershop@gmail.com
The neckline level is drawn on the charts.

Psychology: Buyers have tried to break the level twice, each time without success.
After these two times the sellers have demonstrated their strength and they push
price down into a reversal of trend.
Universal Trading Profits ®

www.trader-tools.info
Most Wanted Expert Advisor and Trading system
For any Updates contact email:
Cs.Tradershop@gmail.com
At the first top the buyers still have strength and attempt to break the high level
again. However, at the second top the sellers are gaining strength and push prices
downwards. Note: until the price has not broken the neckline, the pattern is not
yet validated. In some cases price tests the level again, forming a Triple Top.

How to Trade: While there are several known methods of trading the Double Top,
we will concentrate only on the safest and most profitable one – the pullback
method. It is the most profitable trading method and has the highest hit rate of
all.

The basis of this method:

1. Wait for price to break the neckline level.

2. Wait for price to go back up and touch the neckline from below. It occurs at
around 33% of the double tops. If it does not occur, do not trade this
pattern.
3. Wait for price to create a bearish candle. This candle is used to confirm that
price is indeed pulling back and continuing the movement downwards.
4. After a bearish candle, enter Short trade.
5. Stop loss should be placed 1 pip above the highest high of last 4 candles.
Important: Your stop loss is not related to your trade size, and is calculated
in the formula. After setting the stop loss, calculate your trade size so your
loss will be between 1-3% of your account.
6. Take profit is calculated in the following method: calculate the distance
between the highest high of the double top and the neckline. This is the
size of the double top, and is the profit target for the pattern. Subtract this
amount from the pullback location, to get the take profit location.
You can use these rules to trade the invert variation of the Double Top – the
Double Bottom. All rules and psychology are the same – just reversed. Trade
direction is bullish.

Examples of trades:

Universal Trading Profits ®

www.trader-tools.info
Most Wanted Expert Advisor and Trading system
For any Updates contact email:
Cs.Tradershop@gmail.com
Universal Trading Profits ®

www.trader-tools.info
Most Wanted Expert Advisor and Trading system
For any Updates contact email:
Cs.Tradershop@gmail.com
Universal Trading Profits ®

www.trader-tools.info
Most Wanted Expert Advisor and Trading system
For any Updates contact email:
Cs.Tradershop@gmail.com