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TATAPOWER - Potential Setup and How to Identify double top setup

BSE:TATAPOWER   TATA POWER CO.LTD
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TATAPOWER SETUP

Price is nicely moving in a channel and making higher highs.

Price is near Fib level and near the trend line . If price breaks the trendline then it should move till the next resistance level . However looking at recent Volume I do not feel the price will move above the trendline. However this a potential setup to go long if prices breaks the trend line and to go short if price retraces.



Basic Double Top Rules:

Trading Double tops and Double bottoms is simple and profitable

It works on all time frames

Why it works?
They work because quite often traders wait for confirmation that a support or a resistance level is holding before they are willing to enter a trade.
After it has been accepted once (the first touch), more traders can easily identify the level and are willing to commit their capital (the second touch)

To Trade Head and Shoulders you will need:

1. Support and Resistance
2. Candelstick Patterns
3. A Crooked Shoulder

I am considering that you guys know what is support and reistance and candel stick patterns. Double Top's and Double Bottoms are very effective near support and resistane areas. I'll explain what a crooked shoulder is:
What is a crooked shoulder?

This helps make trading double tops and double bottoms higher probablity

We are trading on the high premise that the second touch is where more sellers (sellers in this example) are eager to jump on the move

For this reason we need to see a Lower second touch for a double top

This suggest we may see stronger reaction for the second touch.

When to enter the trader:
If you see couple of bearish candel or pin bars or engulfing candels at the second touch. basically you should hav confirmation that price is going to reverse.

Stop Loss: should be just above the first touch

Take Profit or 1st Target should be just above the center of V


Backtesting is one of the key factor to become the best trader

***For Educational Purposes only***


Trade active: There was a bearish pin bar at the trend line. Bearish pin bar at the trend line indicated price will move down and it happened.