What is ‘and’
Rounding the top of the figures used in technical analysis, which is determined by price movements that, when graphed in the form of an inverted letter “u”. Rounding top may form at the end of a long upward trend and indicates a reversal in the long-term price movement. A pattern can develop over several weeks, months or even years, and is rare for many traders
Rounding top pattern can also be described as an inverse saucer. On the contrary, it is the opposite of the rounding bottom. It can also be tied to a double top or triple top.
Rounding Out The Top Model
When after rounding the top, traders can also watch the volume, which is usually higher, as envisaged price increases and decreases on a downward trend. In a rounding top, trend line after the peak of the maximum forms an inverted U-shape. In this case, the price will increase to a New high. Then it has been steadily declining from the resistance level to form a rounded top. The volume will usually be highest if the price increases can occur even in a downward trend on the stage of the sale. Rounding rule the upper part will also be bearish for security. However, investors should be careful when after rounding the top as a support for prices of securities can occur as a result of multiple rounding of vertices to follow a double top or triple top pattern.
Rounding Out The Bottom
The rounding bottom is the opposite and negative signals. In the rounding bottom price starts with a tendency to lower prices until it reaches the fulcrum. After reaching the point of support, the price will begin to gain momentum. The trend line after the fall of the price will form a U-shape. Rounding bottoms can signal a reversal, which will lead to a bullish Outlook for the security. This template may also be accompanied by another rounding bottom forming a double bottom if the price is resisting the bullish trend. In the rounding bottom, it is expected that as a result of the reversal, traders tend to take a long position at the support level to profit from future earnings.
If rounding of the top row of the diagram does not turn, it could form a double top. In a double top pattern the price of the financial instrument will be shown two consecutive upside-down models U-shaped. In these cases, investors do not fully bearish and continue to believe that the price can remain at peak levels.
Ultimately, the double top is a combination of two rounding tops. This pattern, when investors resist the bearish trend. As a rule, this model, like the rounded top, it will indicate the end of the bearish trend. With a double top pattern forms a valley between the two inverted U shape, which is the neckline. Neckline becomes an important support level. After the second rounding top price will not be a meeting and usually comes down below the chin for a bearish reversal.
The positioning of the double top can be similar to positioning for the rounding top. Double top is also regarded as a reversal pattern. Thus, investors tend to take a short or sell position after the second rounding top is approaching the neckline.