Get started

Double Top or Bottom

SPXS- Bear is the new Bull?**Disclaimer**: This analysis provides an overview of the historical performance of SPXS and highlights potential trading strategies based on observed patterns and volatility. However, this is not financial advice, and past performance is not indicative of future results. Traders should consider broader market conditions and any upcoming economic events when making decisions. ### Technicals - Seasonality - RSI Support & Resistance ### **Bearish Seasonality in August and September** August and September have historically been bearish months for the broader market, which tends to be bullish for SPXS, given that it is an inverse ETF of the S&P 500. This inverse relationship provides opportunities for traders looking to capitalize on negative market sentiment during this period. The upcoming Federal Reserve meetings on **September 17-18** and **September 19-20** may significantly impact market movements. The chart currently shows a **double bottom** pattern, a bullish reversal signal, which could indicate further upside potential for SPXS if confirmed by the market’s reaction to the Fed's decisions. Though it is likely that they will lower rates, which is bullish for the market, and bearish for SPXS. --- ### **Key Statistics for August and September** - **Returns**: SPXS tends to perform well during market downturns, particularly in August and September, as volatility spikes. The maximum percentage increase in these months has reached substantial levels. - **Max % Up**: Historically, SPXS has seen maximum gains of **up to ~30% in September**, making it an attractive vehicle for traders expecting bearish trends in the broader market. - **Volatility**: SPXS’s volatility remains elevated in August and September, allowing for significant swings in both directions. Traders should be cautious but could benefit from these sharp movements, especially when combined with proper risk management. --- ### **Probability of a Breakout** The chart displays a clear **double bottom pattern**, a common bullish reversal indicator. The probability of a breakout depends on multiple factors, including broader market sentiment, technical resistance levels, and upcoming economic news such as the Federal Reserve’s meetings. Historically, double bottom patterns have a success rate of around **70%**, meaning that when the price breaks above the resistance level, there is a strong chance of an upward move. Given the market conditions, the bearish seasonality of August and September further supports the potential for a bullish breakout in SPXS. --- ### **Setting Stop Losses** Risk management is crucial when trading SPXS due to its volatility and leveraged nature. Here are some ways to set effective stop losses: 1. **Tighter Stop Loss**: - For more conservative traders, place a stop loss just below **$7.297**, which is the pivot level. This may reduce risk but could also lead to getting stopped out in case of minor volatility. 3. **ATR-Based Stop Loss**: - Using the **Average True Range (ATR)** as a volatility-based indicator, you could set a dynamic stop loss. If the ATR is **0.50**, for example, place your stop **0.50 to 1.0 points** below the breakout level. --- ### **Risk Management: Kelly Criterion** Given that the average return in September is **2.23%** and the positive probability (Pos%) is **47%**, managing risk with a structured approach is essential. The **Kelly Criterion** helps determine the optimal position size based on probabilities and expected returns, balancing growth while minimizing risk. The **Kelly Criterion formula** is: \ Where: - \( f^* \) is the fraction of capital to allocate to the trade. - \( b \) is the odds of winning, which can be estimated by the average return (2.23% or 0.0223). - \( p \) is the probability of winning (47% or 0.47). - \( q \) is the probability of losing (1 - p = 0.53). **Applying the Kelly Criterion**: 1. Estimate the odds of winning: In this case, the average return for September is 2.23%, so: \ 2. Winning probability: \ 3. Losing probability: \ Now, applying the Kelly formula: \ Since the result is negative, the Kelly Criterion suggests **not placing a trade** in this scenario, as the negative expectation would not justify the risk. However, many traders use a **fraction of the Kelly Criterion** to limit exposure to volatility. A **half-Kelly** strategy, for example, would mean investing around **2-5%** of capital, adjusting for risk tolerance. --- ### **Conclusion** For those looking to take advantage of bearish trends in the broader market, August and September have historically provided favorable conditions for SPXS. The upcoming Federal Reserve meetings may act as key catalysts for further upside, particularly if the market reacts negatively to any interest rate decisions, potentially confirming the double bottom pattern. However, given the high volatility associated with this period, it is critical to manage risk carefully and stay updated on macroeconomic developments.
AMEX:SPXS
by livingdracula
Alikze »» SUI | Daily FVG gap🔍 Technical analysis: Daily FVG gap - According to the analysis presented in the previous post, after creating demand in the green box area, it grew to the supply area. - Currently, according to the structure formed in the supply area, a twin roof with a shorter roof is observed. - But in the 8H time frame, it is moving in a descending channel. Demand has also been met at the bottom of the channel. - Therefore, according to the FVG gap in the 1D time frame, if the selling pressure continues, it can make a correction to the green box area and retest it to fill the gap. 💎 Alternative scenario: also, if he can break the middle of the channel upwards, he can retest the supply area again. »»»«««»»»«««»»»««« Please support this idea with a LIKE and COMMENT if you find it useful and Click "Follow" on our profile if you'd like these trade ideas delivered straight to your email in the future. Thanks for your continued support. Best Regards,❤️ Alikze. »»»«««»»»«««»»»««« BINANCE:SUIUSDT
Short
by alikze
Double Bottom LongGood day traders, i hope you have all been well. Lets get into it. This is a follow up on the NZDUSD formation i uploaded last time, the Double Bottom. We can all agree that the setup played out well, price reached the Resistance(0.62691-0.62970) and i believe price will or is heading back down to retest the neckline of the double bottom before it continues upward and i have identified the possible neckline resistance that was broken and will be retested as new support(0.61335-0.61266). remember chart patterns do work only if you apply them properly and that is at significant Support or Resistance. All the best
Long
by madanhileeroy
Gold Analysis==>>Adam & Adam Double Top PatternGold failed to form a new All-Time High (ATH) at the beginning of the week. Gold has successfully formed the Adam & Adam Double Top Pattern in the Potential Reversal Zone (PRZ)($2,539-$2,515) and breaking the Support lines . Credit terms of Adam & Adam Double Top Pattern: 🔸The Adam & Adam Double Top Pattern has the most credibility among the Double Top Patterns after the Eve & Eve Double Top Pattern . 🔸 Regular Divergence(RD-) between two Tops. 🔸The slope of the second top is higher than the slope of the first top towards the Neckline . I expect Gold to decline to at least the target of the double top pattern and attack the lower support line . Gold Analyze ( XAUUSD ), 1-hour time frame ⏰. Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy; this is just my idea, and I will gladly see your ideas in this post. Please do not forget the ✅' like '✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
OANDA:XAUUSDShort
by pejman_zwin
3
BITCOIN: Double top possible + NAVARRO 200 bullish : Watch out!!BITCOIN: Double top possible: Watch out for 48,000 + NAVARRO 2000 bullish = 2 opposing patterns. The Wolf of Zurich detected a possible double top on bitcoin As expected, the 56,400 was reached perfectly thanks to my analysis. The next levels are: On the decline : 56,425 (again) 48,000 40,770 On the rise: NAVAROO 200 bullish detected, and the price could reach $72,000 then $80,000 In addition, Be careful because there is a bullish divergence with the ROC!! To watch the EMA 50 and 200, and the ICHIMOKU and Fibonacci levels
COINBASE:BTCUSDShort
by Le-Loup-de-Zurich
Beginner Chart Patterns: Head & Shoulders, Double Tops and MoreWelcome to the world of chart patterns—the place where every price action tells a story. And if you read it right, you might just walk away with profits. In this Idea, we explore the immersive corner of technical analysis where chart patterns shape to potentially show you where the price is going. We’ll keep it tight and break down the most popular ones so you’d have more time to take your knowledge for a spin and look for some patterns (risk-free with a paper trading account ?). Let’s roll. Chart patterns are the market’s version of geometry paired with hieroglyphics. They might look like random squiggles at first, but once you learn to decode them, they might reveal where the market is headed next. Here are the mainstay chart patterns everyone should start with: Head and Shoulders, Double Tops, and a few other gems. 1. Head and Shoulders: The King of Reversals First up is the Head and Shoulders pattern—an iconic, evergreen, ever-fashionable formation that traders dream about. Why? Because it’s a reliable reversal pattern that often signals the end of a trend and the beginning of a new one. Here’s the breakdown: Imagine a market that’s been climbing higher. It forms a peak (a shoulder), pulls back, then rallies even higher to form a bigger peak (the head), only to drop again. Finally, it gives one last weak attempt to rise (the second shoulder), but it can’t reach the same height as the head. The neckline, a horizontal line connecting the two lows between the peaks, is your trigger. Once the price breaks below it, it’s time to consider shorting or bailing on your long position. And yes, there’s an inverted version of this pattern too. It looks like a man doing a handstand and signals a trend reversal from bearish to bullish. That’s Head and Shoulders—flipping trends since forever. 2. Double Tops and Double Bottoms: The Market’s Déjà Vu Next up, we have the Double Top and Double Bottom patterns—the market’s way of saying, “Been there, done that.” These patterns occur when the price tries and fails—twice—to break through a key level. Double Top : Picture this: The price surges to a high, only to hit a ceiling and fall back. Then, like a stubborn child, it tries again but fails to break through. That’s your Double Top—two peaks, one resistance level, and a potential trend reversal in the making. When the price drops below the support formed by the dip between the two peaks, it’s a signal that the bulls are out of steam. Double Bottom : Flip it over, and you’ve got a Double Bottom—a W-shaped pattern that forms after the price tests a support level twice. If it can’t break lower and starts to rally, it’s a sign that the bears are losing control. A breakout above the peak between the two lows confirms the pattern, signaling a potential bullish reversal. 3. Triangles: The Calm Before the Storm Triangles are the market’s way of coiling up before making a big move. They come in three flavors—ascending, descending, and symmetrical. Ascending Triangle : Here’s how it works: The price forms higher lows but keeps bumping into the same resistance level. This shows that buyers are getting stronger, but sellers aren’t ready to give up. Eventually, pressure builds and the price breaks out to the upside. But since it’s trading, you can expect the price to break to the downside, too. Descending Triangle : The opposite of the ascending triangle, this pattern shows lower highs leaning against a flat support level. Sellers are gaining the upper hand and when the price breaks below the support, it’s usually game over for the bulls. But not always—sometimes, bulls would have it their way. Symmetrical Triangle : This is the market’s version of a coin toss. The price is squeezing into a tighter range with lower highs and higher lows. It’s anyone’s guess which way it’ll break, but when it does, expect a big move in that direction. 4. Flags and Pennants: The Market’s Pit Stop If triangles are the calm before the storm, then flags and pennants are the pit stops during a race. These patterns are continuation signals, meaning that the trend is likely to keep going after a brief pause. Flags : Flags are rectangular-shaped patterns that slope against the prevailing trend. If the market’s in an uptrend, the flag will slope downwards, and vice versa. Once the price breaks out of the flag in the direction of the original trend, it’s usually off to the races again. Pennants : Pennants look like tiny symmetrical triangles. After a strong move, the price consolidates in a small, converging range before breaking out and continuing the trend. They’re short-lived but pack a punch. Final Thoughts To many technical analysts, chart patterns are the best thing the market can do. The secret code, or however you may want to call them, they can give you insight into the dealmaking between buyers and sellers and hint at what might happen next. Whether it’s a Head and Shoulders flashing a trend reversal, a Double Top marking a key resistance level, or a Triangle gearing up for a breakout, these patterns are essential tools in your trading garden. So next time you stare at a chart, keep in mind that you’re not just looking at random lines. You’re reading the market’s mind from a technical standpoint. And if you know what to look for, you’re one step closer to cracking the code.
TVC:DXYEducation
by TradingView
7
GBPUSD SHORTI'm currently participating in a trading competition, which is why I'm opening more trades than usual—these are not on my personal account. Typically, I only open one trade per day on my personal account, but only when my setup shows a high probability of confirmation. Trade Management: I've decided to open a short position because the price has been creating Fair Value Gaps (FVG) consecutively on the 5-minute chart, and it seems likely that it will seek liquidity in the lower zones. Additionally, there's a 4-hour FVG, which increases the probability of the price continuing to drop. However, once it reaches the sell-stop, I plan to take partial profits (70%). Risk: 1% Risk-Reward Ratio: 2.84
Short
by Jaytradermb