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Chapter 14, Part II. Double top and Double bottom.

Discussion in 'Complete Trading Education- Forex Military School' started by Administrator, Jul 7, 2011.

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  1. Administrator

    Administrator Just Administrator :-)

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    Part II. Double top and Double bottom. [​IMG]
    Commander in Pips: Before shifting to discussion of patterns directly, I want to make a short plan of this discussion. First, we will study the classical approach and explanation of a pattern. Then, we add additional advanced tools that will allow you to look at it under different angle. Finally, as I’ve said, these patterns often fail nowadays due to market makers greed. But precisely in those moments a lot of possibilities appear to trade their failings. Also with some patterns we will discuss how manage trading position.

    Pipruit: Cool, Sir. It’s really intriguing.​

    [​IMG]

    Commander in Pips: I’m glad. All that I will say about the Double Top pattern (sometimes this pattern calls as “M”-shape or just “M”-pattern, because “M” reminds two tops) is also absolutely applicable to Double Bottom (sometimes this pattern calls as “W”-shape or just “W”-pattern, because “W” reminds two bottoms) but in the opposite direction, I hope this is clear?

    Pipruit: Absolutely, Sir.
    Commander in Pips: Let’s take a look at the first chart then. Here we can see perfect example of Double Top pattern, so let’s discuss it:


    Chart #1 | JPY/USD futures monthly. M-top pattern
    [​IMG]

    This chart contains all necessary explanation of the Double Top pattern:

    1. Tops/bottoms should be equal to each other. Sometimes the second top/bottom could be slightly higher/lower than the first one. This happens, because market-makers like to grab public’s stops that have been placed just above the previous highs - in the most obvious place. As we’ve said once – if something looks obvious – then it obviously wrong, so as with public stops…On our chart the second top a bit lower, so market makers were kind to public and allowed them to make some profit on this pattern. But, it has happened in 80’s. Now we can’t count on such liberality from our opponents on the forex battlefield;
     
    #1 Administrator, Jul 7, 2011
    Lasted edited by : Mar 26, 2016
    Hamza Samiullah and fran alvarez like this.
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