Double Top Pattern

Double Top identifies two peaks separated by a number of bars with similar prices. After the second peak forms, a bearish candle confirms the reversal.

Testing indicates an average annual return of about 58%. It performs best in the stocks market.

The strategy sells short upon confirmation with a stop above the pattern highs, aiming to profit from a trend change after buyers are exhausted.

Positions are closed via stop-loss or discretionary targets.

Details

• Entry Criteria: Two tops within SimilarityPercent after Distance bars.
• Long/Short: Short only.
• Exit Criteria: Price rallies or stop-loss.
• Stops: Yes.
• Default Values:
  • Distance = 5
  • SimilarityPercent = 2.0m
  • CandleType = TimeSpan.FromMinutes(15)
  • StopLossPercent = 1.0m
• Filters:
  • Category: Pattern
  • Direction: Short
  • Indicators: Price Action
  • Stops: Yes
  • Complexity: Intermediate
  • Timeframe: Intraday
  • Seasonality: No
  • Neural Networks: No
  • Divergence: Yes
  • Risk Level: Medium