Double Top and Double Bottom trading strategy!
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Thread: Double Top and Double Bottom trading strategy!

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    Double Top and Double Bottom trading strategy!

    This is also one of the trading strategy and the words, DOUBLE TOP means TWO TOPS(HIGHS) and DOUBLE BOTTM (LOWS) . THis is a good trading strategy and risk reward is minimum 1:1 and you can extend to further 1:2 or more depending on the previous trend. Trend if your friend is also sometimes plays important parts.

    I will be sharing my new and also old charts , and you can learn from it and use it to daily basis to find this formation on different time frames of different charts.

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    DOUBLE BOTTOM OLD CHART : 03/09/2013



    This chart was of AUD USD in the daily time frame. It showed double bottom pattern where you can see that the price rejected and took reversal . It was previous bearish but after forming double bottom , it went bullish and formed 2 bullish (UP) candles.

    Double Top old chart: Dated 14/11/2013



    This picture was of GBPJPY daily chart where at the resistance a double top was formed because the candle closed below the resistance , which made and told the whole story that the resistance is hgihly effective. However the trend was up so although it didnt hitted my tp , but thankfully i closed in some profits rather than loosing.

    Chart date: 19th Nov 2013




    This is CHF/JPY daily chart and you can see that market formed a double bottom pattern and it also formed a double top pattern before . ANd now its again on the resistance and maybe could break that too. So if we find some good candle showing good/buy sell opportunity with low risk and high reward.

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    Last edited by Gamer; 12-12-2013 at 08:04 AM. Reason: flooding

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    I hardly recognized that his is the strategy that i know until i saw the drawing on the trading chart. it is true that it is used to get the reversal. But it is a breakout trading system that is mainly meant to trade the trend of the market, and it is called "trendline" trading system. You can save the day with this system, it is very powerful.

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    My friend it is a good strategy but it is not only work with AUDUSD but also it works with most of the pair better say all pair. So I think a forex trader needs to understand different types of technical strategy and have to adopt at their trading if any chance to adopt.

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    I don't think that ill support you double top strategy on the gbpjpy hence the price or the candlestick hasn't formed a reversal candlestick to indicate that top has been formed,you just did your analysis based on the fact that the price touched previous resistance on the day chart and refuses to close above the high,it would be much preferable that the candlestick stick show a clear rejection of the previous high by forming a reversal candlestick form a clear indication before entering the market.

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    Old chart, dated 20-11-2013, but still running in +++profits



    This was old chart of NZDUSD pair which i had analyzed in the daily time frame . Although this pair was mainly analyzed because of the head and shoulders pattern but you can see that on the right two shoulders that is double top pattern and still its running with good pips/profits. So it was like a double confirmation trade.

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    There is a possibility in the EUR/USD pair in the daily time frame that there could be a head and shoulder pattern formation as there is 61.8% fibo and strong resistance exact on the right shoulder. ALso there is a bearish engulfing pattern and right shoulder in daily is exact on 50% retraement of weekly bearish candle. This all things are making this trade quadruple confirmation trade as well. Hence, as right shoulder has already formed, its indicating a double top as well.
    In weekly, there is also an inside bar + pin bar.

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    This is a good confirming method of making trading on the candlestick style of trading, traders with confirming of the trend and sees this will know that things is about to change with the direction it is maintaining, it is a good way to reverse what the trend is saying on a long trader trading with time form of 1 day and above that.

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    Quote Originally Posted by silverlady View Post
    This is a good confirming method of making trading on the candlestick style of trading, traders with confirming of the trend and sees this will know that things is about to change with the direction it is maintaining, it is a good way to reverse what the trend is saying on a long trader trading with time form of 1 day and above that.
    you are indeed right that the double top strategy and double bottom strategy are good strategies that any forex trader can use to confirm that trend is about to change. But this candle stick pattern is better and more significant when considered in the bigger timeframe chart.

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    Quote Originally Posted by silverlady View Post
    This is a good confirming method of making trading on the candlestick style of trading, traders with confirming of the trend and sees this will know that things is about to change with the direction it is maintaining, it is a good way to reverse what the trend is saying on a long trader trading with time form of 1 day and above that.
    This is the way i do my own trading on this as well. It is for the confirmation of the trading that i use it for, this is owning to the fact that i am a trend trader, i hardly do the things that will not make my trading secured. And this is the reversal of the trend, it should be avoided at times, it is used for my one assurance.

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