Stocks & Commodities V. 22:11 (44-48): Rotten Apples? Spotting Adam And Eve Double Tops by Thomas N. Bulkowski
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Stocks & Commodities V. 22:11 (44-48): Rotten Apples? Spotting Adam And Eve Double Tops by Thomas N. Bulkowski
These variations on the classic double top have performance differences. You can profit from them. Here’s how.
Recognizing a budding double top is the first step to averting disaster. Trading them properly can save you from taking a loss — it may even make you a tidy sum. Ignoring them could hurt your wallet. What is a double top, and what do Adam and Eve have to do with it? In early 2003, the market started trending upward. By January 2004, stocks began to get pricey, and I was expecting double tops to appear like daffodils in the spring.
A double top looks just like it sounds: a twin price peak with highs near the same price level and peaks separated by several weeks (some recommend they be at least a month apart). It forms at the end of an upward price trend, although the trend need not be very long. The dip between the two peaks is usually 10% to 20%, sometimes much more. I have found that the deeper the valley, the better the pattern’s performance.
Adam and Eve refer to the shape of the tops. I am sure you can guess what they look like, but I will spell it out anyway. Adam tops are narrow and pointed, perhaps with a one-day spike. Eve tops are more rounded, wider, and sometimes have many peaks near the same price.
These variations on the classic double top have performance differences. You can profit from them. Here’s how.
Recognizing a budding double top is the first step to averting disaster. Trading them properly can save you from taking a loss — it may even make you a tidy sum. Ignoring them could hurt your wallet. What is a double top, and what do Adam and Eve have to do with it? In early 2003, the market started trending upward. By January 2004, stocks began to get pricey, and I was expecting double tops to appear like daffodils in the spring.
A double top looks just like it sounds: a twin price peak with highs near the same price level and peaks separated by several weeks (some recommend they be at least a month apart). It forms at the end of an upward price trend, although the trend need not be very long. The dip between the two peaks is usually 10% to 20%, sometimes much more. I have found that the deeper the valley, the better the pattern’s performance.
Adam and Eve refer to the shape of the tops. I am sure you can guess what they look like, but I will spell it out anyway. Adam tops are narrow and pointed, perhaps with a one-day spike. Eve tops are more rounded, wider, and sometimes have many peaks near the same price.
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