Recognize the double top and trade the double bottom

Recognize the double top and trade the double bottom 300 169 Minimalist Trading – Best Trading Indicators for TradingView

Recognize the double top and trade the double bottom

◷ Last updated

Introduction

Today we’re looking at another trading setup using our technical indicators, which are considered to be among the best indicators for TradingView. In particular, we’re using the Bottoms Tops Signal in combination with the Levels and Zones, and the RSI Exhaustion.

By conducting a simple price action analysis on our TradingView chart, we recognize a recently formed double top and we see what could be a double bottom. With the Bottoms Tops Signal and the RSI Exhaustion, we are able to confirm such chart analysis and we define the entry price, the stop loss, and the take profit levels of what looks like a great trade setup. Also, the Levels and Zones indicator helps us in precisely defining the take profit level and to find further confidence in this forex setup. This is the only way on how to read forex clearly and effectively because, considering how hard is forex trading, you should always have technical indicators, real forex winning indicators, which support you in keeping your fx strategy clear and simple.

Trade setup – 15 May 2020

Recognize the double top and trade the double bottom Setup 1

We have a buy setup which is confirmed because:

    1. There’s a significant divergence between the price, which is falling, and the RSI Exhaustion, which is rising
    2. The RSI Exhaustion is bearish exhausted (colored red), which means that the price doesn’t have too much room to move lower
    3. We have a confirmed bottom

We set the stop loss below the two bottoms’ lowest price while to set the target we exploit the Levels and Zones indicator.

Trade update – 18 May 2020

Recognize the double top and trade the double bottom Setup 2

The price has moved higher quite significantly and has just formed a top. Moreover, the RSI Exhaustion is both overbought and bullish exhausted.

To call this a major top is exaggerated, but we must play it safely so, since we are now above a major support, we moved the stop loss to breakeven.

Now we’re in a risk-free trade and so, in the worst-case scenario, we won’t lose any money.

Trade update – 18 May 2020

Recognize the double top and trade the double bottom Setup 3

Now the trade is a bit compromised because a technically valid short setup has formed.

Actually, the trend line that we are able to draw on the RSI Exhaustion is a bit too steep but the short setup is still valid.

That said, we are on the buy-side of this trade and our initial analysis was 100% correct.

Moreover, the price is still above a major support which was just retested and prevented the price from falling lower.

And lastly, we’re at breakeven, which we actually moved a bit higher, just below the major support.

Let’s see if this short setup creates any trouble towards reaching our target.

Trade closed – 18 May 2020

Recognize the double top and trade the double bottom Setup 4

The price initially tried to move lower but then it became a very quicky rise up until the target.

In the end, we got a more than 4x profit, which was possible because we’ve been able to make a clear and simple analysis and maintain such a clear view throughout the trade. We are convinced to have one of the best trading indicators combination but, of course, you should always combine those with an easy forex strategy in order to achieve consistently profitable returns over the long term.