The Double Top Pattern
The double top pattern is a bearish pattern and highlights a sell signal. It shows that the price of an asset has rebounded twice but remains unable to sustain a bullish trend.
The double-top pattern almost always confirms a rapid price reversal drop in the making and is easy to identify.
This pattern has an “M” shape with two peaks and a “neckline” indicating a breakout. However, the M shape is not always perfect; a sighting of the double peaks is what matters.
To trade using the double-top pattern, launch a sell trade the instant the price move breaks below the pattern's neckline or begins on a pullback.
Only do this after the double peak has been confirmed and a protective stop-loss has been established.
The Double Bottom Pattern
The double bottom is the opposite of the double top, indicating a bullish trading opportunity. It shows that the price has fallen to a particular mark on two occasions but has refused to break below it.
This pattern can be seen to take the “W” shape, with two bottoms and a neckline.
Once a double bottom is identified, it is almost certain that the underlying instrument's price will record a notable surge. Traders can execute a long position on confirmation of the pattern (breaking the neckline) and plot a stop-loss.
The entire process described above is automated by the KT Double Top Bottom indicator, relieving traders of some of the hassle of curating accurate trade signals.
The indicator identifies double-tops or double-bottoms and hunts for the neckline in the chart. Once this is spotted, it proposes a sell or buy signal based on its findings and suggests trade entry and exit level inputs based on the risk allowance created by the trader.
Inputs of KT Double Top Bottom Pattern Indicator
Features
- It's based on one of the most reliable trading patterns and brings some fine-tuning and automation to the process.
- Also features input line customizations to allow traders to extract the desired results.
- It can be used across all time frames and all financial markets.
- It can be combined with other indicators and trading strategies to yield better results.
Combining the Double Top Bottom Pattern with other Indicators
Though the KT Double Top Bottom indicator is notably reliable, traders can combine it with other indicators to double-check a potential trade signal before executing.
For example, traders can use simple indicators such as support and resistance levels or moving averages. Traders can also use this indicator with volatility and momentum indicators such as the Relative Strength Index (RSI) and Bollinger bands.
