A double top refers to a higher rate that the currency has risen to twice, but failed to exceed. In this case, the asset can generally be expected to trade within the range. If a breakout occurs, just as with a double bottom, it is usually a substantial movement.
If you pay attention, you’ll notice that the model of a double top resembles the letter “M”.
- Point A - maximum as a result of an ascending trend
- Point B - minimum
- Point C - nem maximum
Theoretically, both maxima should be at the same level.
A double bottom refers to a lower rate at which the currency had declined to twice, but failed to penetrate. Generally, the asset will trade within that range, but if a breakout occurs, it can be expected to be a substantial move