How Do You Analyze Double Tops Chart Pattern?

Trading XAUUSD Interpret Double Tops Chart Pattern

To interpret the double tops chart pattern a gold trader will need to learn about the double tops chart pattern technical analysis explained below.

Interpret Double Tops Chart Pattern

Double tops xauusd chart pattern is a reversal chart pattern that forms after an extended upwards xauusd trend.

This double tops chart pattern formation is made up of two consecutive peaks that form on the gold chart and these two gold peaks are roughly equal - with a moderate trough in between the two xauusd price peaks.

Double tops xauusd chart pattern is considered to be complete once xauusd price makes the second peak and then penetrates the lowest xauusd price point between the two xauusd price highs - this lowest point between the two xauusd price peaks is called the neckline.

Sell gold signal from the double tops chart pattern is generated when the price breaks below the neckline.

In gold trading double tops chart pattern is used as a early warning signal that an upward gold trend is about to reverse.

However, the double tops chart pattern is confirmed once the xauusd price moves below the neckline - when the gold neckline is broken the xauusd price will move below the neckline.

Neckline is just another name for the last support level formed on the xauusd chart.

Summary: Trading Gold Interpret Double Tops Chart Pattern?

• Double tops xauusd chart pattern forms after an extended upwards gold trend move
• Double tops xauusd chart pattern signals that there will be a reversal in the upward trend direction
• Gold traders will sell when price breaks below the neckline: as explained on the double tops chart pattern example illustrated and explained below.

Double tops xauusd chart pattern look like an M Shape pattern - the best double tops chart pattern reversal xauusd trading setup is where the second top is lower than the first top as shown on the gold double tops chart pattern below:

This means that the reversal gold signal can be confirmed by drawing a downward gold trend line as shown on the xauusd trading example illustrated and explained below. If a gold trader opens a sell gold trade using this double tops chart pattern reversal gold signal the stop loss order will be placed just above this downwards trend line.

Interpret Double Tops Chart Pattern

How Do You Read Double Tops Chart Pattern