In this video, you will learn how to identify and trade the double chart pattern. You locate this pattern at the end of an uptrend. You can take a short position using this pattern. It looks like the letter "M" after forming two peaks.
The psychology behind this pattern is that buyers are met with resistance twice and price reverses to the downside. Look for the break of the neckline for the completion of this pattern.
One way to trade this pattern is to wait for price to break the neckline to the downside. Now, it is time to go short, and place your stop-loss above the resistance level. Measure the distance from the resistance to the neckline, use this distance from the neckline. This is your take-profit level.
A conservative way is to wait for price to retest the neckline after the break below it. The broken support now acts as resistance. The stop-loss is smaller and take-profit remains the same.