Double Top Reversal Chart Pattern Video Lecture - Chart Pattern Trading

good afternoon everyone this is
Christian with perfect stock alert calm
a 100% free service for smart investors
and traders all we asked in return a
please refer a friend or I'll hit you in
the face with a brick what I can't I
can't say that today we're gonna be
looking at the devil table reversal
chart pattern and this particular
pattern is actually somewhat difficult
to call and even though it's quite easy
to spot once it's completed let me show
you what we have here the reversal as
it's in the title they're basically
calls for a reversal from an uptrend to
a downtrend
it's a peaking or a topping pattern so
the first thing you have to have is an
uptrend before you can see it develop so
back here you'll see we have a low point
here a higher low here high point here
higher high here higher low this is
actually an uptrend right here that's
what you want to see before you can see
the devil top reversal pattern form the
first top is actually of no consequence
you don't need to worry about what level
that's add you need to worry about the
volume level none of that stuff but
here's the thing you do need to know
when you see the top there's got to be a
span of time in between that High Point
and the next to form that devil top and
it must be a substantial amount of time
minimum of one month
preferably three to six months before
you actually see that what you don't
want to do is to see a move let's say
you're moving along here and you get up
here to this high you pull back for a
couple of days and then shoot back up
and then to turn around and say okay
that's a double top and we're going
lower that's that's not at the top
there's got to be a span of time in
there and I'll show you why okay as I've
said after you have your uptrend in play
and you get your first high point there
it sells off from that you want to see
three to six months of time pass and
you'll often see a stagnation of price
activity just kind of sideways really
making a really good trough or it's in a
period of time this is showing your
stupid
not a lot of demand there not a lot of
activity going on and that's a sign that
maybe you're starting to wane the trend
to the upside is starting to wane so
when you see the next move to the upside
that's when you start getting the
potential for a double top I just say
potential because he's not there until
you've actually complete the formation
but for now something else you need to
know about this double tops it doesn't
have to be exactly double top and for
example you have here on this chart but
3363 was the high the next high doesn't
have to be 3363
on the nose it can be within 3% most
technicians look at that is still being
a double top on this particular run here
you would like to see a decrease in
volume compared to the previous low
volume rally is not sustainable we've
mentioned that before and other analysis
that we've done and that's why you look
at the volume you'll notice here you
have some volume but it's less than
previous volume you're trending down
there okay so that's important to note
you come up here you bump against that
resistance line but you still haven't
actually formed a double top and the
next stage would be this sell-off
following that double top and that
sell-off should have a good strong
volume behind it all right you'll notice
that's greater Silvo and then we've seen
on the by volume side and you'll also
notice that the speed of the sell-off
here is much faster than it was back
here back here it took like 20-something
days to actually get down to the bottom
where in this particular case took about
five days the sell-off there has
increased people are realizing oh wait
we're not going any higher and supply is
much greater suicide is much greater
than the by volume and you you fall much
much faster
you're still not a double top even
though you pull back down to test that
previous low points that we're acting a
support that's still not a double top
until you actually break down close
below that okay okay once you have the
first stop and play and you've pulled
back down and bounced around for a while
it helps you
spot that there's lack of demand there
you have a move again back to the dev
side touching that double top price our
area and within three percent of it and
you roll over and you sell off quickly
back down to support and then break
below that support when I say break
below the support for me closing below
this trendline is a break of that
support however some technical analysts
will require different things either a
particular percentage move below that it
may be three percent or five percent and
some analyst will require that the price
activity will close the letter for a
period of time for example two three
five days something like that to confirm
and the breakdown of that actual support
line another key item to note which I
almost overlooked was the fact that you
have to have in your pullback you want
to see 10 to 20 percent retracement in
the pullback of it first and the first
peak of the devil top to the trough low
that's something else that can keep you
from calling a false step up top is he's
got to have that amount in this
particular case we're looking at the
chart had a 15% moved from the high and
back down to the lows of the trough okay
one last item to note regarding the
double top is that you can find a target
for how low you expect the price to fall
once the double top has formed you do
that by simply finding the high points
drawing a trendline across that and
there and then from that trendline to
the lowest point of the trough draw a
straight line down and subtract that
amount from the basic support line right
here where you broke out below that
subtract this amount here from here you
get Target or projection for how low you
expect price activity to go before
finding it another support line remember
it's always always only a target and you
should be using it as a guide not an
exact metric okay
please take a moment to review our
disclaimer the information provided here
it is our opinion only under no
circumstances do any statements here
represent a recommendation to buy or
sell securities or make any kind of an
investment you are responsible for your
own due diligence to summarize we do not
provide investment advice nor do we make
any claimed or promises that any
information here will lead to a profit
loss or any other result these videos
are for educational purposes only