Technical Teaching: Double Top Formation

⸻When the trend reaches its peak, only the freedom to fall remains🔥

1. Two Mountains Theory - "What goes to extremes must return"
• The price has been climbing along the upward trend line to reach Top 1, taking a breath before charging towards Top 2, yet still hitting the same "ceiling" - resistance.
• Zhuangzi said, "Heaven and earth are born together with me," and mountains also have their limits; the inability to elevate the second mountain peak indicates that the upward momentum has reached its end.

2. Neckline Lost - "Cliff Appears in an Instant"
• The horizontal line at the double top bottom serves as both support and a psychological barrier; the moment the candle breaks through it is the "point of belief collapse."
• In philosophy, it is called "negation of negation" — the rise is negated, and the trend reversal is established.

3. Pullback Entry - "Proving Its Weakness"
• The price retraced to the neckline and encountered pressure at the red circle, which is precisely the selling window: the new shorts confirm that the old support has turned into resistance, daring to take a heavy position.

Operation method
• Identifying double peaks: The two peak levels are close together, and the volume decreases progressively with each peak.
• Draw a neck line: connect the low points between the two peaks and wait for the candlestick to close below it.
• Wait for a pullback: Short if the price rebounds but does not stabilize above the neckline; set the stop loss above the pullback high.
• Set target: First target = vertical distance from double top to neck line shifted down; if it breaks down with volume, you can move the stop profit in batches, aiming for a ≥1:3 risk-reward ratio.
• Capital Management: Single risk ≤ 2% of account, allowing small losses to exchange for large wins.

Why do this?
"Go with the trend and confirm the structure" - a double top tells you that the bullish fuel is exhausted, and the neckline retest lets the market admit it. You just need to get on board one step ahead before it says, "I really can't fall any further."

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