These formations, after of the formations Shoulder-Head-Shoulder, occur more frequently. They are highly reliable formations and indicate a change in trend. The Double Top patterns by the figure that they draw are identified with a M and a W for Double Bottom patterns.
These formations are characterized by the creation of two maximums or minimums of a similar height and shape to obtain the target equals the patterns of S-H-S
Double Top (M)
This pattern appears at the end of uptrends and involves the creation of two maximums made by the price, which will function as a resistance. In Figure A-3-1 shows the maximum A and C have similar heights, the point B is the minimum that separates the maximums and is the Neckline or support, which when is broken complete the formation. The goal to achieve (line X) is measured from the maximums A and C to the minimum B, then there is projected just later that the Neckeline or support is broken.
In Graph A-3-1 shows the prices of the pair GBP/USD in timing of 4 hours, in this one shows how the price makes the maximums A and C of equal value, becoming a strong resistance this level, when the price break your minimum B at point D, the price drops to achieve the objective of price.
Double Bottom (W)
This pattern is an accurate reflection of Double Top patterns and all the beginning of this one is applied of reversed form. Example: The pattern W is formed in downtrends and its formation is the creation of two minima of a similar decline (Figure A-3-2).
In Graph A-3-2 shows the prices of the pair GBP/USD in timing of 4 hours, this one shows how the price makes the minimums A and C of equal value when the price exceeds its maximum B at point D, the price makes pullback. Note how the level the maximum B becomes a resistance to a support.