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Double top and bottom patterns are curious graphical formations. They can signal trend changes in the market. Learning to recognize and use them well could be useful for traders.
The double top appears after a long rise. Two peaks reach almost the same price. It seems that buyers are getting tired.
How to operate it? Some place sell orders below the neckline. It's a key level. If it breaks, the price could continue to go down. Or not.
The double bottom is the opposite. It arises after declines. Two valleys touch a similar minimum. Sellers lose strength.
To take advantage of a double bottom, some buy upon breaking the neckline. It could be the start of an upward movement. Perhaps.
Be careful, don't just rely on these patterns. Look at other indicators. Context matters. The market is complex.