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
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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.
Comments
pipmasteret
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I am new here. Are the dashed yellow lines your support and resistance levels for this time chart?
imdbeststocktrader
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Hi Pipmasteret
In all my charts:
Orange Lines - Monthly Support/Resistance Lines
Blue Lines - Weekly Support and Resistance Lines
Fluorescent Green Lines are - Daily Support and resistance line. (not plotted on this chart)
You can also refer to below chart and read the description for more information.
imdbeststocktrader
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Please let me know if you need any more information
InsiderB
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I guess that channel will work and break below 79's, good for our game !
imdbeststocktrader
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It seems so the channel will work.
InsiderB
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One of the detailed explanatory Author, You are doing good work.
imdbeststocktrader
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Thank you for your kind words. Apprecation from a season trader like you motivates me. I have faced lot of difficulties learning the trader. My ideas will shorten learning curve of many other traders. I just want to contribute back to the community.
Rajesh_P
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Thank you sir for the setup and explainng double tops. for double bottom do we have to follow the same criteria but in opposite direction.
imdbeststocktrader
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No Worries...
and yes for double bottom you can follow the same criteria but in but opposite to double top