welcome to this week's video this is dr. Barry Burns with Top Dog Trading and today
we're talking about stock market double top trading chart patterns and we'll
also look at double bottoms
so here is the way that people get this wrong. I'm going to show you how the
professionals do this as opposed to amateurs and the devil's in the details
like a lot of things when it comes to the stock market trading these double
bottom and double top the chart patterns are very very detailed and very
important
so the problem that i find some people having is they'll look at you something
like this
I'll see this high and they'll see that high and they'll say that's a double top
okay that is not technically a double top that is just I would just call them
even highs and the reason is the first thing you need to get a stock market
double top trading chart pattern is you've got to have a trend and the
indication of that is the word top
we're looking for the top we're looking for the end of a trend that's really the
point of this pattern
so this is not a trend that is just a half cycle move a trend is a long-term
move
so let's scroll forward here and let's find a real trend and there we go so
great
okay here we go so now we have a trend now the average trend last five waves
so as you can see here we've got one
two three four and five
that's your average trend that's the sweet spot for a trend to end now i'm
not talking about Elliot waves here if you want to learn how I account waves be
happy to show you that another time it's actually pretty darn simple but it's
much more objective than elliott wave so the wave accounts don't change they they
stay but you can get more than five waves the way that I count them so that
the average mathematically is five so we're not even going to look for a
double top until we get five waves so for example I mean even here we see
we've got what some people would see as a potential double top there again those
are just even equal highs
that is not where the trend ends so the trend started way down here and then we
go up here so this is it now
now what we're looking for is a retest of this high school rule number one when
it comes to double tops is we're not even looking for them until we put in at
least five waves and again you can pretty much see it basically what i'm
talking about ways i'm just talking about higher highs and higher lows but
there is a candlestick rule that applies as well which is why that is a failed
three and that's a real three
so it's a little candlestick pattern rule that we applied to it
it can't just be barely another player hi there has to be a real body above the
previous high that closes above it
so that makes it more we committed move now
once we put in 15 that is the only time we can now start looking for a double
top again
double top meaning the end of a trend so you've got to have a trend started
so here we go and this is where we come back down and then we retest this high
all right now again that's still not enough that's the price pattern
they're retesting that high now we have the price pattern in place but the
question is is that going to actually work will the trend end there and the
market then go down and there would be two reasons you want to know that number
one if you were long take profits lock in your profits at that point number two
if you wanted to take a reversal and actually short that then that would be
an opportunity for you as well it could do it either way
so just remember the famous saying we all know the trend is your friend until
the end and part of what that means is that the early in the trend
it's not likely to end but the trend is your friend until the end means that the
longer that trend goes on the less likely it is to continue because it's
not your friend anymore
so therefore what else we look for all right not just the wave count that's
number one how far has this trend been going how extended is it
that's number one then we look for a cycle hi by the way if you want my cycle
indicator be happy to share that with you just send me an email at . top dog
training . com and i'll show you how to get this indicator absolutely free and
my tutorial on how to use it because it's very hard to read unless you know
how
how to use it then I make it really easy for you how to really read it but
there's false signals and there's good signals and I have to share with you
that the difference
and then the final thing we look for is a momentum shift in momentum shift and
that's what we see here that's this black line when this line goes from
magenta to black
that means that now momentum is gone from bullish too bearish
so you'll see here for example that momentum was still in it goes between
black and magenta
but we're looking forward to stay solid when it does go a little black here at
that high then the market does end up putting in a little bit of a lower level
right business
these are just short-term signals that's actually a long signal there that but
we're looking for is the confluence of all this stuff you can't trade any one
of these indicators the indicators only do what they promise which what indicate
right
they just indicate peito tell you anything that will make you money if
indicators made you money we call money makers
so there one piece of evidence of one of the energies in the market and you put
together the pieces of evidence in a methodology that makes you money
so the pieces of information we're putting the other here is extended trend
we would reap
we test that high at a cycle high with lower momentum when you put all three of
those together and then we have the double top treating chart pattern on the
stock market
you put all that together then we have a probability scenario so that's what to
look for
all right maybe i'll do another video showing you double bottoms - we run out
of time here so if you like this video and you're watching it on YouTube please
click the thumbs up icon below and leave a comment because that encourages me to
give you more free tutorials here on YouTube
also i'm giving away one of my favorite treats strategies called the rubber band
trade which has an extremely high win loss ratio is very simple strategy you
can learn in about twenty six short minutes so i'll give you that video
explaining the trade strategy absolutely free
when you simply click on the image in the top left corner or if you're on a
mobile device click on the little I with a circle around and operate hand corner
of this video and if you're not watching the video on youtube there's probably a
link or enough to inform somewhere on the web page and i will personally email
this video to you along with some videos that explain more about other patterns
head and shoulders
double tops or bottoms triangles and again how you put these things together
as a professional does
yeah