Double Top and Double Dip Formations - Technical Analysis - Forex Doping

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Double Top: Double top signs  beginning of downward trend. Double trend is occured after seeing a new peak which raises resistance level. After that, price drops back, but then it tests again same high level or resistance point.

Market believes that upward trend will not continue, anymore, because peak tests only two times, also, price drops back only two times. As is seen in next image, when support level which is showed with red line is broken, prices begin to draw back quickly. Volume an another factor which should be paid attention in formation. While prices make the second peak, high volume doesn’t occured like the first peak. In addition, volume begins to increase when point of support is broken. Goal of formation is between crest line and support line.

Double Dip: Double tip formations are the exact opposite of double top formations. Markets test trough value two times, but price don’t be less than this level. Buyers attack again after this formation, and price begins to climb up. Volume is a remarkable factor in formation. When sellers  are intensive in first dip, it lessens in second dip. When price breaks towards upwards resistance level which is stated with red, fast upward attack begins. Goal of formation is between resistance and dip level.

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