Double Tops and Double Bottom Stock Indices Strategies

A trader should wait for the stock index price to turn in the opposite direction after touching one of the stock indices Bollinger bands before considering that a stock indices reversal is happening.

Even better a trader should see the stock index price cross over the moving average.

Double Bottom Stock Indices Trend Reversals

A double bottoms is a buy signal set-up. Double top forms when price action penetrates the lower Bollinger band then rebounds forming the first stock index price low, then after a while another stock index price low is formed, & this time it is above the lower Bollinger band.

The second stock index price low must not be lower than the first one and it important is that the second stock index price low does not touch or penetrate the lower Bollinger band. This bullish stock index trading setup is confirmed when price action moves and closes above the middle band (simple moving average).

Double Bottom - Bollinger Bands Stock Indices Trend Reversals Strategy Using Double Bottom Patterns

Double Top Stock Indices Trend Reversals

A double top is a sell signal set-up. Double top forms when price action penetrates the upper Bollinger band then rebounds down forming the first stock index price high., then after a while another stock index price high is formed, & this time it is below the upper Bollinger band.

The second stock index price high must not be higher than the first one and it important is that the second stock index price high does not touch or penetrate the upper Bollinger band. This bearish stock index setup is confirmed when price action moves & closes below the middle band (simple moving average).

Double Top - Bollinger Bands Stock Indices Trend Reversals Trading Strategy Using Double Top Patterns