Currency Trading Trend Types - Top and Bottom Reversal Patterns
Currency trading double top and bottom patterns are very common in technical analysis, and can be used to predict a price change in direction.
Double top patterns are also called "M" patterns, and start off with a long rise in currency trading price. The pattern continues then with two tops, and ends with the drop of currency price.
Double bottom patterns are called "W" patterns, and start off with a long drop in currency, followed by two bottoms, and ending with a rise in currency price.
There are a few characteristics to top and bottom patterns:
- Top and bottom patterns are marks of a long term change in trend direction.
- Tops are usually more fluctuant and shorter that bottoms.
- The double top and bottom trends are a king of verification that the change in currency trading direction is an established one.
Triple Top and Bottom Patterns
A triple top is a currency trading pattern where a currency reaches a price three times, and is unable to surpass the resistance level beyond those three peaks. A triple top is a mark for a strong resistance level.
A triple bottom pattern occurs when the trading reaches the support level three times, and only manages to break through on the last one.
Using tops and bottoms could be seen as an Online Currency Trading Strategy that is useful if you have to courage to invest in reversal trends. Try it and you'll see just how great these trends are.
Posted by Paul Sander