The Double Top and its counterpart, Double Bottom, seem to be the simplest formations. Both consist of three reversal points; Double Top comprises two peaks of nearly the same size and a bottom between them, hence the name of the pattern. The line running through the tops is the resistance line which should be nearly horizontal.
Being clearly reversal patterns, Double Tops appear in the uptrend and reverse it to the downside as price breaks through the support line (the one running through the bottom, parallel to resistance). Premature breakouts in Double Tops are seen quite often. Performance-wise, among the Double Tops, the ones with rounded peaks seem to be the most desirable to find.
Double Tops develop rather quickly: it takes only several weeks for them to be completed, otherwise their performance might be impaired. Volume usually trends downward and this is considered more favorable than uptrending or erratic volume.
For educational purposes only. Not a recommendation of a specific security or investment strategy.
Technical analysis is not recommended as a sole means of investment research.
Past performance of a security or strategy does not guarantee future results or success.