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Basic Pattern: explanation of DOUBLE TOP.
1) Prior Trend:
For the double top pattern, the prior trend must be up-trend for several months.
2) First Peak:
Normally, this peak will be higher peak of current trend.
3) Neck Line:
From the prior trend, neck-line should be 10% to 30% normal case. The lows are sometime Rounded or drawn out a bit which can be sign of low volume and low demand.
4) Second Peak:
Price moving from neckline to second peak will be low volume. Ususally second peak within 3% of the previous high(1st peak) is called 2nd peak.
5) Decline from peak:
Price decline after reaching the 2nd peak with high volume and marke a GAP or two.
For the double top pattern, the prior trend must be up-trend for several months.
2) First Peak:
Normally, this peak will be higher peak of current trend.
3) Neck Line:
From the prior trend, neck-line should be 10% to 30% normal case. The lows are sometime Rounded or drawn out a bit which can be sign of low volume and low demand.
4) Second Peak:
Price moving from neckline to second peak will be low volume. Ususally second peak within 3% of the previous high(1st peak) is called 2nd peak.
5) Decline from peak:
Price decline after reaching the 2nd peak with high volume and marke a GAP or two.
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