Posts tagged: volatility

Chart Patterns: Double-Top

Introduction: 

The principles discussed in last month’s articles on chart patterns, the overview and the head and shoulders, underlie reversal chart patterns in general. They apply to this article’s topic as well: the double-top reversal pattern

Perhaps the most common mistake when identifying patterns is neglecting to consider the preceding trend. This is akin to neglecting the context. To emphasize an important point made in the overview article: 

“Chart patterns are divided into two main groups: reversal patterns which occur at the end of a trend, or continuation patterns which reside within the trend. It logically follows then that a prerequisite to any chart pattern is the existence of a prior trend.” 

Read more »

WordPress Themes