Give these double top trades a miss. Day trading the Dax

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Learn to trade – Stocks & Forex

Give these double top trades a miss.

I was Day trading the Dax again today and a seemingly good double top appeared on my chart. I didn’t take the trade. Here is why.

I always look for three things in taking trades, no matter how good the chart pattern looks. I search for Context, Content and Confluence.

Double tops & bottoms, Triple tops and bottoms are prevalent in the markets and they produce great probability because they are easily visible and definable. The algos trade them and anything an alto does, you would be wise to do to.

These chart patterns are the Content and are only one part of the puzzle. In this case the content was not right for the trade. On the higher timeframe the market was in an uptrend and so this ruled out the trade as being viable for me.

Also my trader equation – a mathematical equation was not right. The ATR in the market was too low to trade at the time the pattern appeared.

Consider all of these aspects if you are day trading. .

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