Double Top Patterns

Double Top Pattern on EURCZK

Double Top Pattern on EURCZK

Double Top Pattern on EURCZK is a classical chart pattern located at the end of a huge move. Therefore, it has bearish implications. Let’s take a look.

The premise

This is the last article from a series of twelve in which I explain how did I make +8.72% in a single trading day. The previous articles from this series are #AMZN#MMM#TRV#TSLAAUDJPYAUDUSDUSDCADFTSE100SP500GOLD and USDRUB. Now, let’s take a look at the EURCZK daily chart. We can easily see that there was a very wide range trading. Or, you can call it a very wide rectangle pattern. There was also a valid breakout into the downside. But, the price returned back into to pattern. Usually, when the price returns into the pattern, the price will break violently into the other side. And it happened here too. You can see the same thing here, but with a different outcome: Inverted Cup and Handle on USDRUB.

Double Top Pattern on EURCZK daily chart detail

How did I trade the double top pattern on EURCZK?

I simply placed a sell stop order slightly below the support of the pattern. And, I considered support the March 27th 2020 daily candle low. Consequently, my order is activated on April 8th 2020.

The outcome

Let’s take a look now at what happened after the breakout from this pattern. So, if you’ll take a look at the next chart, you’ll see that the price went in my direction, after the breakout, for a few days. And, I managed to close the trade with one day before the reversal of the price. You’ll find the reason why I decided to close this trade in this article: +8.72% in a single trading day.

The outcome of the double top pattern on EURCZK daily chart

The conclusion

The most interesting thing from this article is that you can compare this pattern with this one: Inverted Cup and Handle on USDRUB. So, in this way, you can see the importance of the risk and money management in trading. We have two almost identical patterns with very different outcomes. Therefore, I find these things fascinating and I’m glad that I can share them with you. I’ll let you now to contemplate about these two patterns. And, until my next article stay tuned and stay safe. And the most important: don’t forget to follow Capital Patterns on Twitter and Facebook.

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