Chart Pattern Double Top

Double top is a reversal pattern formed by two consecutive highs that are at the same level (slight difference in values is allowed) and an intermediate low between them. It is expected that after the price again reaches the level of the first high and then reverses and falls below the level of the intermediate low, the fall will continue further by about the difference between the highs and the low.

The indicator searches for patterns on the last 600 bars. The pattern consists of lines indicating price movements (Price Line) and neck lines (Neck Line). The neck line is a horizontal line drawn through the intermediate minimum. The start and end points of each price line, except for the last one (point 5), are located in 5/5 pivots. Point 5 is located at the intersection of the last price line with the neck line. In the In Progress mode, the indicator looks for not only formed, but also emerging patterns. The second peak of such a pattern may not be in the pivot, and the price lines that form it will be dotted.

The pattern is considered formed when, after the appearance of the second peak, the price (close) falls below the neckline. The dotted horizontal line that ends with the Target label indicates the expected price level after the pattern has formed. As new bars appear, the line extends to the right until the last bar, until the pattern status changes from Awaiting to another. The label tooltip shows the price and the current status of the pattern. When the status changes, the color of the label also changes. There are 3 statuses in total:

  • Awaiting. The price did not reach the expected level and did not go above the second top.
  • Reached. The price reached the expected level.
  • Failed. The price did not reach the expected level and went above the second top.

If the indicator finds two intersecting patterns, then preference is given to the one whose status is Awaiting. If the status of the intersecting patterns is Failed or Reached or the status of both is Awaiting, then the pattern will be displayed on the chart, in which the price values of the vertices are the most similar, i.e., more accurate.

Inputs:

  • Trend Height – Sets the required height of the trend preceding the pattern relative to the height of the pattern itself. The height of the pattern is the difference in price between the maximum of the tops and the intermediate minimum. Percent value.
  • Second Top – Determines which patterns to display with respect to whether the second top of the first top is above Higher or below Lower. If Both is selected, all patterns will be displayed.
  • Permissible Deviation – The maximum allowable difference in tops heights. The height of the top is calculated from the intermediate minimum. Percent value.
  • In Progress – Search for patterns that have not been fully formed yet.