Chart Pattern Analysis
Short entries may be initiated in a double top formation at (the reverse applies
for double bottom formations):■ (^) The second peak with a stoploss positioned just above it
■ (^) The breakout of the validation level with a stoploss positioned just above it
or the second peak
■ (^) The retest of the validation level after a valid breakout with a stoploss posi-
tioned just above it or the second peak
■ (^) The breakout of the new support level created during a retest of the validation
level with a stoploss positioned just above the support level, the validation
level, or the second peak
In Figure 13.16, we observe the completion of a double top and bottom for-
mation on the four‐hour chart of EURUSD.
In Figure 13.17, we observe the various double top and bottom formations
with their corresponding follow-through reversal action.
In Figure 13.18, we observe various double top and bottom formations on the
daily chart of Delcath Systems Inc. Notice a one‐to‐one horizontal channel price
target coinciding with a double top three‐to‐one downside target projection.
triple tops/bottoms
A triple top formation is simply a double retest of a prior resistance level and a
triple bottom is a double retest of a prior support level. A triple top is a bearish
reversal formation, whereas a triple bottom is a bullish reversal formation. A
figUre 13.16 A Completed Double Top and Bottom Formation on the 4‐Hour Chart
of EURUSD.
Source: MetaTrader 4