When looking at the double top/double bottom indicator, I wonder a couple things:
how long does trend have to be to consider it a valid indicator? timewise or number of bars?
how wide does the double top/bottom have to be? I saw someone call two bars right next to each other on a daily chart call it a double bottom…
You could say it takes at least five bars for each formation to be completed. A lot of people make the same mistake, I did at the beginning.
That�s truth, it is a common mistake. A double top or double bottom pattern should look something close to the image below.
Great Dr.Hofmann, sometimes it isn’t that easy to find those formations in the charts. I have a question about this also, which TF are these types of patterns more common with?
That is a good question because the pictures showed in the links are for months, for a very long term trades
Scalpers couldn�t use it
Maybe programming an EA
It can occur in either case. You�ll see that most of the patterns, not to say all of them, can be found in any given time frame. Try to look at your charts, the more you do the easier you�ll recognize the patterns.
Besides taking a look on the TFs, has this pattern actually worked for you? I mean, I barely use indicators because the volatility on the markets, I would like to know if this one has helped you guys to forecast any rebound lately.
I’m not completely sure but, i guess trading following the patterns all the time, having the indicators as the trendsetters could sometimes slow you down a bit when you are about to buy or sell. Candles are the most reliable tool in my opinion.
Exactly, I feel more into candle patterns and price action. Though I am trading 5m TF, and it has worked great for me.
The idea of this indicator (double top and bottom) (if it is considered as indicator) is to establish a specific point to get a specific T/P after the sign has happened
Different when you use indicators for scalping for example
It isn�t exactly an indicator RickyThor, though it can give you as much info as any complicated indicator if you learn how to read them. One thing I consider important here is that you not only need to identify and be aware of the pattern but of all the panorama, I mean, you need to see the picture as a whole in order to determine plausible trends.
That�s what I had thought
But with this procedure you just need to see the image recognize the pattern and then put the order expecting only one trend (depending if it is top or bottom)
I know this pattern has to be taken as another tool you have to analyze the trend, however I still don’t feel it helpful. I guess if you get to be an expert using an specific indicator you can obtain good results.
agree with you Shell! it’s a matter of becoming an expert with one or two indicators, no more than that cause it will be so hard to develop the strategy. But as i said before, i guess the most trustworthy tool is still being the candles chart
It�s necessary to develop you own strategy of course and in order to do that you must make the indicators and settings your own but I think that in the search of that you need to learn as much indicators and techniques until you find what fits you.
“doubles” form in ALL timeframes BUT are definitely not one candle next to another !
the “usual” method is for the higher timeframe charts, although they will certainly show up on all of the lowers also, but they stand out BOLDLY on the higher.
Doubles invariably reverse, BUT after that reverse the currency may try for a TRIPLE top or bottom, and at that point i remember the words of a very experienced trader who stated "there aint no such thing as a triple top (or bottom) ---- THAT one you can assume will continue in the direction it was heading with NO reversal of proportion.
with the lower timeframes, doubles can occur correctly within a few hours of each other on something like the 15 minute, and within an hour or so on something like the one minute.
higher timeframes would include 5 or more hours for the H1 and a week for the daily.
these are all approximates, with actual times being shorter by a bit, or longer but invariably they can be seen on one chart without having to stretch it out to a year (although that works also, sometimes !)
its kinda like pornography — u may not be able to describe it, but you can sure tell it when you see it !
enjoy and trade well
mp
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