There are many types of charts which highlight signals of Buy and Sell : the most important of which is : The Double Top.
The double Top appears at the end of a continuous uptrend to signal a change of the latter to a downtrend.
Also, it signals that the market is about to test the low levels and shows that the price moved up again and formed another top, and this underscores the strength of the resistance line. For this reason, the reversing of the uptrend and the prompt drop of the prices is probable. In general, the 2nd reversed Top is lower than the 1st.
Technically speaking, it would be better to open a sell position at the 2nd top or at the Neckline, as a reversing trend might take place.
We notice in the former example in the chart that the support level was the mostly reached by buyers, falling short therefore in breaching it high, which explains the shaping of the 2 Tops and the probability of the change of the previous trend.
These Tops can also be thrice (3) or four (4).
In order for you to know more about forex trading and be better prepared to formulate trading strategies like : Triangles, Trend, Channels, Breakout, Flags, Waves, Head and Shoulders and more, and make informed decisions, we invite you to register at MBCFX’s special offer: Free webinars : www.mbcfx.com/webinareng.php
