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How to trade double tops and double bottoms? What's up
How to trade double tops and double bottoms? What's up Traders, and welcome back to the channel
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In today's video, I want to show you the rules
In today's video, I want to show you the rules for one of the simplest patterns that keeps forming in the market on a regular basis
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As I said in the intro part of the video
As I said in the intro part of the video in today's video, we will cover the double bottoms and double tops rules, a double bottom
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And double top is basically one of the simplest patterns,
And double top is basically one of the simplest patterns, that keep forming in the market, on a regular basis, whether you're trading stock market, Forex Market, or any other type of New Market, you will eventually
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see double bottoms form at the bottom of the barrel
see double bottoms form at the bottom of the barrel strength and a double tops forming at a top of the bullish Trends
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They give us a good glue, so that we know
They give us a good glue, so that we know and they gave us a good structure, making our lives easier to put those stop-losses even correct place
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So let's go to the charts and let me show
So let's go to the charts and let me show you your rules and a few examples
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All right, so here we are on the charts and
All right, so here we are on the charts and in front of me, I have a nice double bottom example that this is it
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Let me show you, okay? This is the double This
Let me show you, okay? This is the double This is our first swing, a first swing low
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We have a nice for Tradesmen and then the sellers
We have a nice for Tradesmen and then the sellers are trying to put your price down, but they found they find a resistance from bars, which eventually bring the price, okay? And for you to understand,
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okay, you see, maybe this is a double bottom, but
okay, you see, maybe this is a double bottom, but what are the exact rules to? You know, not the rules for engagement but rules to identify the double bottom because not every double bottom is a
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Okay, so to help you with this first, what I
Okay, so to help you with this first, what I got to say is that a double bottom can only form after a bearish move? Okay
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You cannot have a double bottom at a top of
You cannot have a double bottom at a top of the Bush move it at top of the bullish, what do you usually have any kind of pattern happens? Is a double top, which is a reversal
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So the price can go down a lower lower lower
So the price can go down a lower lower lower into Bears, move it a bottom of the bearish move
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The first thing you got to do is indented by
The first thing you got to do is indented by the first swing, okay? And then you pick Addy, you pick a first bottom and Mark to Lyons
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So the first line is here, which shows the lowest
So the first line is here, which shows the lowest close of a candle, okay, which is right here, you see that there is no closing, none of those two candles
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Where is the lowest low of the bottom of the
Where is the lowest low of the bottom of the first swing? Not the lowest low of the candle that has the lowest close because that, you know, that doesn't need to be that way
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So they have this love is closing, this is our
So they have this love is closing, this is our lowest low, okay? Then we have a small retracements here and then the price actions charge to retest her basically
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I'm going to zoom this in a little bit, okay,
I'm going to zoom this in a little bit, okay, for you guys to better seat, it comes down here and test is with this candle right there
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Okay? So the rules for a double bottom is it
Okay? So the rules for a double bottom is it means to test the lowest clothes but you're not close be on the lower slow
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It did test our lowest clothes and it didn't a
It did test our lowest clothes and it didn't a star Louis slow but did not close below our lowest slope
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Google can see that we only close below our first
Google can see that we only close below our first close, but we didn't close below the low so that that means that we have a strong by her support here
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This is lowest low, and this is the lowest close
This is lowest low, and this is the lowest close and we did not on a second test
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We did not, we did not close below the lowest
We did not, we did not close below the lowest lowest tested it But we did not close below the lowest slope, we are repeat on a second test
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Okay, so, even if this camera would not hit this
Okay, so, even if this camera would not hit this lowest low, it would be valid pattern
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But if this can only mainly chance, close below the
But if this can only mainly chance, close below the lowest slow, we have a new low, which is a lower level lower close, and we would still be in a bearish trend
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Okay, and what do we have to do? Now, we
Okay, and what do we have to do? Now, we need to identify the first test
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Okay, so we are again putting our horizontal line up
Okay, so we are again putting our horizontal line up house, closes here and high, as high as this line here
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So I'm going to bring my text to ya, highest
So I'm going to bring my text to ya, highest close Is here and the highest high is there
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Der found a resistance from sellers for sellers, who are
Der found a resistance from sellers for sellers, who are trying to push the price down and then they found her a support from bars
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We're pro buyers, we're trying to push your price up
We're pro buyers, we're trying to push your price up one more time, but the resistance from sellers at the same point on the first swing was even higher which ended up putting my sellers ended up
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This is a candle that confirms the buy a double
This is a candle that confirms the buy a double top and this is the candle that just tries to where the bar is just try to push the price even higher by the by they did
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So they found a resistance from Sellers and they Conroy
So they found a resistance from Sellers and they Conroy sellers continue to push the price down and doubt and yeah and basically that's it guys
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So another thing that you need to, you need to
So another thing that you need to, you need to watch when you're finding these double bottoms and double tops
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It's basically that you have a clear White Space in
It's basically that you have a clear White Space in between the first test in the second test
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I'll so when you're first starting out and maybe you
I'll so when you're first starting out and maybe you want to have a valid rules, for example, what do you find a valid retracement? Okay, because that doesn't make your life much more easier is
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I'm somehow experienced Traders, because I've seen a lot of
I'm somehow experienced Traders, because I've seen a lot of these double bottoms and double tops
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However, some of you might need a, some kind of
However, some of you might need a, some kind of a rule to identify the replacement that you need from a first test
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That will be made Bill overload over clothes candle which
That will be made Bill overload over clothes candle which we did not get here none of those candles close below below the first account before it
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So some of you might might not find this double-talk
So some of you might might not find this double-talk valuable but I do this is strictly discretion
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All you do what they think is best for you
All you do what they think is best for you rules are basically rules are the same, okay? Those are the rules for the double top, you know, it's not a rules are definitive, you need to
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The highest high and high is closed, and you need
The highest high and high is closed, and you need to get a test of at least have a high is closed
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If we, if we were to have this candle close
If we, if we were to have this candle close above the highest high, we would be in a bolt ran because we got a new high and otherwise you know that didn't happen
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Let's say this is a bear Trend and we have
Let's say this is a bear Trend and we have a nice first test of some kind of a level here
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OK, Google Louis always closed, and this is why do
OK, Google Louis always closed, and this is why do it slow? So, what do we need to do? Now, we are waiting for Price action
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The price action actually rallied up, find some how some
The price action actually rallied up, find some how some kind of a support here valid bank apoe
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But now the sellers are trying to push a price
But now the sellers are trying to push a price down and violating for a first test over to close
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So let me ask you is this a valid double
So let me ask you is this a valid double bottom at this point right now considering that their price action has been printing candles lie
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And we can close within the brackets, but we cannot
And we can close within the brackets, but we cannot close beyond the lowest bracket and then I will bottom and Beyond the highest bracket on me, a double top
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Boom, it might cost us out if we have some
Boom, it might cost us out if we have some kind of a stop loss, very tight, but I don't know how tight you want to have your stop-loss, okay? But I'm saying it's still valid double
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And eventually, as you can see, the did rally up,
And eventually, as you can see, the did rally up, okay? And it might win
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If you have a big enough stop-loss year, that's why
If you have a big enough stop-loss year, that's why there's another lesson here on importance of back-testing, because this might be a double bond
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This candle is this here? We had a valid Apple
This candle is this here? We had a valid Apple Bottom, even though we don't have a vix and even though it failed, this was a valid BB
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And we that being said, guys, thank you very much
And we that being said, guys, thank you very much for watching this, until the end of this video
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If somebody says you're different, I don't think they know
If somebody says you're different, I don't think they know the rules for double bottom and double top
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I also do a forest Market analyzes each and every
I also do a forest Market analyzes each and every day so that you can see how I engaging into my trades
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If you like this, kind of videos consider subscribing if
If you like this, kind of videos consider subscribing if your new year and make sure to hit that like button as soon as that Bell button
-
So the YouTube algorithm notifies you every time it post
So the YouTube algorithm notifies you every time it post just kind of a video
-
I thank you very much for saying that till the
I thank you very much for saying that till the end of this video and speak to you soon
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00:00:00How to trade double tops and double bottoms? What's up Traders, and welcome back to the channel
-
00:00:05In today's video, I want to show you the rules for one of the simplest patterns that keeps forming in the market on a regular basis
-
00:00:12So stay tuned
-
00:00:13As I said in the intro part of the video in today's video, we will cover the double bottoms and double tops rules, a double bottom
-
00:00:21And double top is basically one of the simplest patterns, that keep forming in the market, on a regular basis, whether you're trading stock market, Forex Market, or any other type of New Market, you will eventually
-
00:00:33see double bottoms form at the bottom of the barrel strength and a double tops forming at a top of the bullish Trends
-
00:00:39They give us a good glue, so that we know and they gave us a good structure, making our lives easier to put those stop-losses even correct place
-
00:00:47So let's go to the charts and let me show you your rules and a few examples
-
00:00:51All right, so here we are on the charts and in front of me, I have a nice double bottom example that this is it
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00:00:57Let me show you, okay? This is the double This is our first swing, a first swing low
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00:01:03We have a nice for Tradesmen and then the sellers are trying to put your price down, but they found they find a resistance from bars, which eventually bring the price, okay? And for you to understand,
-
00:01:14okay, you see, maybe this is a double bottom, but what are the exact rules to? You know, not the rules for engagement but rules to identify the double bottom because not every double bottom is a
-
00:01:24double bottom
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00:01:25Okay, so to help you with this first, what I got to say is that a double bottom can only form after a bearish move? Okay
-
00:01:31You cannot have a double bottom at a top of the Bush move it at top of the bullish, what do you usually have any kind of pattern happens? Is a double top, which is a reversal
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00:01:41pattern for the, you know, after a bullish move to
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00:01:43So the price can go down a lower lower lower into Bears, move it a bottom of the bearish move
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00:01:48You usually have a double bottom
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00:01:50Okay, I hope that that is clear
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00:01:53Now, let's go to your rules so to make it easier for you
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00:01:56The first thing you got to do is indented by the first swing, okay? And then you pick Addy, you pick a first bottom and Mark to Lyons
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00:02:03I'm going to bring my okay
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00:02:05So the first line is here, which shows the lowest close of a candle, okay, which is right here, you see that there is no closing, none of those two candles
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00:02:14Close below this line here
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00:02:15And what you, what you got to do next is pink, a rider line
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00:02:19Where is the lowest low of the bottom of the first swing? Not the lowest low of the candle that has the lowest close because that, you know, that doesn't need to be that way
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00:02:28You could have another candle here, which could close lower than this
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00:02:31And then you would need to adjust this year to that candle
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00:02:34But here we have an almost identical candles here we did
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00:02:37And then tickle closes
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00:02:39So we have a simple one line, it's pretty easy bottom
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00:02:42So you got to use the next line
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00:02:44Next horizontal line to bracket it up and have this
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00:02:47So they have this love is closing, this is our lowest low, okay? Then we have a small retracements here and then the price actions charge to retest her basically
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00:02:56Yeah
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00:02:56Basically, we test our first bottom, okay
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00:02:59Swing low and we've comes here
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00:03:01I'm going to zoom this in a little bit, okay, for you guys to better seat, it comes down here and test is with this candle right there
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00:03:09Okay? So the rules for a double bottom is it means to test the lowest clothes but you're not close be on the lower slow
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00:03:16Okay
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00:03:17And we got this in this entire second part of the bottom
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00:03:20It did test our lowest clothes and it didn't a star Louis slow but did not close below our lowest slope
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00:03:26OK
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00:03:26Google can see that we only close below our first close, but we didn't close below the low so that that means that we have a strong by her support here
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00:03:35Okay? And basically that's it
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00:03:38Those are the rules
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00:03:39OK, Google, meet, I can type this here
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00:03:42This is our lowest closed, here's our lowest close
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00:03:45Close slope, let me just dragging
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00:03:47This is our lowest low here
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00:03:49This is lowest low, and this is the lowest close and we did not on a second test
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00:03:54We did not, we did not close below the lowest lowest tested it But we did not close below the lowest slope, we are repeat on a second test
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00:04:03We need to test the Lotus close but not close beyond the lowest slow
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00:04:07Okay, so, even if this camera would not hit this lowest low, it would be valid pattern
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00:04:12But if this can only mainly chance, close below the lowest slow, we have a new low, which is a lower level lower close, and we would still be in a bearish trend
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00:04:20But here, as you can see, we did not
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00:04:23We found bar support here and bars eventually pushed the price up
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00:04:27Okay, I hope this is clear for you
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00:04:29Now, I W, I want to go and find the same example for a double top
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00:04:33Okay, let's just see this with me
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00:04:35It should be somewhere here
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00:04:37Okay, I'm very good, very good
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00:04:39So we have a buyer's pushing the price up
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00:04:42Okay, and what do we have to do? Now, we need to identify the first test
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00:04:46The first swing High here it is
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00:04:49Okay, so we are again putting our horizontal line up house, closes here and high, as high as this line here
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00:04:55So I'm going to bring my text to ya, highest close Is here and the highest high is there
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00:05:00Wait, this is my mistake hi-hi-hi, his clothes
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00:05:05She this high is closed and high as high as this one
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00:05:08So and then the bar is Van
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00:05:10Der found a resistance from sellers for sellers, who are trying to push the price down and then they found her a support from bars
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00:05:17We're pro buyers, we're trying to push your price up one more time, but the resistance from sellers at the same point on the first swing was even higher which ended up putting my sellers ended up
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00:05:28Pushing the price down even further
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00:05:29So that's why they have a test here
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00:05:31This is a candle that confirms the buy a double top and this is the candle that just tries to where the bar is just try to push the price even higher by the by they did
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00:05:41not succeed in to it
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00:05:42So they found a resistance from Sellers and they Conroy sellers continue to push the price down and doubt and yeah and basically that's it guys
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00:05:51So another thing that you need to, you need to watch when you're finding these double bottoms and double tops
-
00:05:56It's basically that you have a clear White Space in between the first test in the second test
-
00:06:00Okay
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00:06:01I'll so when you're first starting out and maybe you want to have a valid rules, for example, what do you find a valid retracement? Okay, because that doesn't make your life much more easier is
-
00:06:13I'm somehow experienced Traders, because I've seen a lot of these double bottoms and double tops
-
00:06:18I can say that this is a valid double-top
-
00:06:20However, some of you might need a, some kind of a rule to identify the replacement that you need from a first test
-
00:06:26That will be made Bill overload over clothes candle which we did not get here none of those candles close below below the first account before it
-
00:06:34So some of you might might not find this double-talk valuable but I do this is strictly discretion
-
00:06:40All you do what they think is best for you rules are basically rules are the same, okay? Those are the rules for the double top, you know, it's not a rules are definitive, you need to
-
00:06:51You need to break it up
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00:06:52The highest high and high is closed, and you need to get a test of at least have a high is closed
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00:06:57And he the need you should not
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00:06:58Price action should not close above the highest
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00:07:00I'm okay
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00:07:01If we, if we were to have this candle close above the highest high, we would be in a bolt ran because we got a new high and otherwise you know that didn't happen
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00:07:09So we are good
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00:07:10It is a valid double-top
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00:07:12Yeah I don't know
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00:07:13I can I find another example for example
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00:07:15Yeah look look at this
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00:07:18Look at this
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00:07:18Okay, so let's say the VR training
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00:07:21This live we have on we have a bear trap
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00:07:23Let's say this is a bear Trend and we have a nice first test of some kind of a level here
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00:07:28So let's break it up this year
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00:07:30OK, Google Louis always closed, and this is why do it slow? So, what do we need to do? Now, we are waiting for Price action
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00:07:38The price action actually rallied up, find some how some kind of a support here valid bank apoe
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00:07:45But now the sellers are trying to push a price down and violating for a first test over to close
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00:07:50Okay, what do we get? Boom
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00:07:52First test overload as closes
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00:07:54Okay, we also tested a lowest low and we did not close by
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00:07:58Call David slope
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00:07:59So let me ask you is this a valid double bottom at this point right now considering that their price action has been printing candles lie
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00:08:07Okay, so we do not know what's going to happen down the road
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00:08:10Is this a valid double-bottom? Yes, it is
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00:08:13Because as you can see her rules, we did not close below
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00:08:16Do you load as low? Here, we just tested it, which is absolutely fine
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00:08:20And we can close within the brackets, but we cannot close beyond the lowest bracket and then I will bottom and Beyond the highest bracket on me, a double top
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00:08:28So, let's see what the price action going to do afterwards
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00:08:32Boom, it might cost us out if we have some kind of a stop loss, very tight, but I don't know how tight you want to have your stop-loss, okay? But I'm saying it's still valid double
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00:08:42bottom
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00:08:42Sure it might not be a winning trade but it's a valid, double bottom
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00:08:47And eventually, as you can see, the did rally up, okay? And it might win
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00:08:51If you have a big enough stop-loss year, that's why there's another lesson here on importance of back-testing, because this might be a double bond
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00:08:59That one eventually, I don't know, but that's the thing here
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00:09:02This candle is this here? We had a valid Apple Bottom, even though we don't have a vix and even though it failed, this was a valid BB
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00:09:10And we that being said, guys, thank you very much for watching this, until the end of this video
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00:09:16Those are the rules for the double bottom double tops
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00:09:19I hope it makes it a little bit clearer for you
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00:09:21Nothing else
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00:09:22Those are definitive rules
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00:09:24If somebody says you're different, I don't think they know the rules for double bottom and double top
-
00:09:29And this is some kind of educational video
-
00:09:31I also do a forest Market analyzes each and every day so that you can see how I engaging into my trades
-
00:09:37If you like this, kind of videos consider subscribing if your new year and make sure to hit that like button as soon as that Bell button
-
00:09:45So the YouTube algorithm notifies you every time it post just kind of a video
-
00:09:50I thank you very much for saying that till the end of this video and speak to you soon
-
00:09:54Bye-bye