http://www.marketgeeks.com/technical-analysis-trading/ - Free Swing Trading Report. Technical Analysis Trading demonstrates the double top and double bottom chart pattern. Many traders rely on complex charts but ignore basic chart patterns. This tutorial will show you how to use one of the best chart patterns available.

1. Basic Technical Analysis Trading Patterns Transcript
1. Title Slide
2. Good day traders, this is Roger Scott from Market Geeks with another trading
tutorial for you today. Please don’t forget to subscribe to our channel for trading
videos and trading tips and please visit marketgeeks.com for your free swing
trading report.
3. Last week I did a short tutorial on basic technical analysis trading patterns. I
wanted to show beginners as well as seasoned traders that simple technical
analysis trading patterns are viable and important tools that should not be
ignored by traders. I received a few emails with questions and comments asking
me to show how to use these patterns to enter the market.
4. Its one thing knowing how to identify a pattern that's developing and it's another
totally different experience trying to understand when to enter and exit markets
when using technical patterns. The reason for this is rather simple, since patterns
are subjective in nature they are harder to interpret than say a moving average or
other technical indicators that are based on math or statistical formulas. With
indicators you know exactly where to enter and exit your orders. With chart
patterns it's easy to misinterpret the chart as well as your entry and exit point.
5. One of the first things you want to do is ignore any pattern that seems difficult to
interpret or seems overly confusing. There is always another opportunity in the
market. Don't feel like you have to trade every pattern that comes along. Stick to
basic patterns such as head and shoulders, double tops and bottoms and
triangles till you get a good feel for these, only then should you start
experimenting with more advanced patterns. I know a small traders group in
Texas that make a wonderful income trading 3 different trading patterns day in
and day out for the last 10 years.
6. The pattern I want to focus on today I one of those classic chart patterns that's
been around for over 100 years. This pattern works with stocks, ETF's, futures
and foreign currency markets. The double top and double bottom pattern is very
flexible and can be utilized for day trading, swing trading and long term investing.
Many swing traders use this pattern with stocks and that's what I'm going to
cover in today's tutorial.
7. Typically you want to keep track of stocks or other markets that are making a
minimum of 50 day high's or low's. I typically start looking for double tops and
double bottoms by going through stocks and other markets that are making
yearly high's or yearly lows. Make sure that point one and point three are almost
equal to each other and that there's sufficient horizontal distance between the
second point and the first and third point. After you see a few patterns like this
one you will get a good visual feel for this pattern.

2. 8. Once the pattern is identified and all three points are determined, you need to
find an entry point. I look for a gap to occur within 5 trading days after the third
point is made on the chart. If I'm trading double bottoms I will look for a gap up
within 5 trading days after point three is made and if I'm trading double tops I will
look for a gap down after point three is made.
9. The stock rallied and never looked back in this example. This is ideally what you
want to see when trading technical trading patterns. Keep in mind that the pattern
can take anywhere from 2 weeks to 2 months to develop, assuming you are
using daily charts. Many traders apply this pattern to 5 minute bar charts when
day trading.
10. The double top is exactly the opposite of a double bottom. This stock has been
setting up for almost two months and gaps down immediately after creating the
third point. Double tops and double bottoms have to be traded exactly the same
way. Don't miss shorting opportunities that show promise, this is a major mistake
made by beginners.
11. In this example, the stock gapped down immediately after the third point was
made. I typically give stocks no more than 5 days and if the stock rallies above
the third point before the entry is triggered, the trade would be nullified because
the pattern would be invalid.
12. You can see the entire progression from the first point to the entry on this chart.
Remember always to wait for a gap down in case of a double top and a gap up
for a double bottom as your pre-entry filter. This shows some additional interest
in the stock or market you are trading and makes a great entry filter.
13. If you are trading double bottoms, your stop loss level is immediately below your
number 3 point and if you are trading double tops, your stop loss level is
immediately above the number 3 point. Make sure you remember the difference
and don't get confused when placing orders and stop orders with your broker.
14. That’s it for today’s tutorial, please don’t forget to subscribe to our video channel
for trading videos and trading tips and visit marketgeeks.com for your free swing
trading report. This is Roger Scott wishing you the best in your trading.
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