Technical Analysis: How Double top pattern is traded

Double top pattern is one of most simple and reliable pattern in technical analysis, there is high probability that a trader will predict correct move most of time. This pattern is very easy to recognize and taking positions is quite simple. You can apply this to any time frame chart may it be weekly, daily or any intraday time frame chart. Have a look at the below image.

Double top pattern

Double top pattern

Steps to follow:

When the price action is at the second top level one can take short entry(short position) in that stock, this short selling is applicable only for the second time and when next timeĀ (third time and so on) same level is approached then trader must remain cautious. This pattern gives you excellent risk reward ratio, most of the time you are going to get 1:2 ratio. In many case it also goes as high as 1:5, so 1 part is your risk and 5 parts are reward.

About Bhaveek Patel

Bhaveek Patel is a technical analyst and investor, his areas of interest includes stock market, forex, gold.


  1. chandan says

    Double bottom pattern is just like a support level. I can simply call it support level instead of double bottom. This pattern is very simple on chart, but how to set targets and stop loss is annoying.

  2. shushrut jha says

    This pattern in trading is highly watched for, i have created a script to find stocks forming this pattern. its still in beta testing period, will share it with you bhaveek.


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