How 3 Simple Conditions Turn a Double Top Into a Buy Signal

Author: Lubosi Forex

Most traders see a double top and expect a reversal. But in strong uptrends, this pattern can fail — and when it does, it often sets up a high-probability buying opportunity. Traders who use the Rocket Booster Strategy understand how to spot these traps and trade them in the direction of the trend.

Here’s how the strategy works — and why some double tops become launchpads, not ceilings.

1. Price Above Both 50 EMA and 200 EMA

When price remains above the 50 EMA and 200 EMA, it confirms strong bullish momentum in both the short and long term. In these conditions, many reversal patterns like the double top often fail. Instead of selling off, price consolidates and continues higher. Traders using this strategy only look for buy setups when both EMAs are pointing up and price stays above them.

2. Bear Trap Setup

A double top often attracts sellers. These traders place their stop-losses just above the highs. If price fails to break the neckline and instead rallies above the top, those stop-losses are triggered, creating a surge in buy orders. This becomes a trap — not a reversal — and the breakout can be fast and aggressive. The Rocket Booster Strategy takes advantage of this liquidity burst.

3. Entry After Confirmation, Not Assumption

Instead of shorting the pattern, traders using the Rocket Booster Strategy wait for one of two bullish confirmations:

• A bounce off the neckline without breaking below it
• A breakout above the second top after the trap is set

At that point, the trend is considered intact, and momentum is ready to continue. The "rocket" is refueled, and the strategy shifts into entry mode.

Trade Setup Example:

• Entry: Near neckline bounce or breakout above second top
• Stop Loss: Below neckline or under the 50 EMA
• Target: New highs and above the pattern top

Final Thoughts

In strong trends, failed double tops are not warning signs — they’re opportunities. The Rocket Booster Strategy filters out weak signals by requiring clear alignment: 

price above both EMAs, pattern failure, and bullish confirmation. When these conditions align, a pattern that looks bearish on the surface becomes a fuel source for the next breakout.

 

Disclaimer: This article is for educational purposes only. Always do your own research and manage risk appropriately.