Double top is a bearish pattern signal, this pattern creates an “M” formation. It is one of the most frequently seen and common of the patterns because it so easy to identify. There are two peaks with the similar height and the middle bottom between two peaks has the uncertain range. The 1st target price when you take a sell position is the middle bottom. If the price goes on your line, max the portofolio you want to take unless a half the beginning to head.
How to trade this pattern?
Go short below the neckline (support level) when the price breaks from (it's second peak) above, the most likely price direction is now DOWN. Place your stop above the second peak price!
Your target must be at least twice the distance from it's second peak break to the neckline.
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