Trading the Double Top


Trading the Double Top

The Double Top, also known as the “M” top, is a price pattern that many traders look for when they are looking to capture profits to the downside. Short selling is when you sell shares that you have borrowed from your broker with the intention of buying back the position at a lower price. Once you have bought back your stock to “cover” the trade, you would then repay the loan from your broker and keep the profits. Risk is to the upside on this strategy so make sure you take good notes with regard to the risk management behind this type of trade.