Wondering what type of a pattern is depicted in the picture below…A Double Bottom? Or a Double Top? Perhaps both!
Well this is the beauty of Technical Analysis; it shows each exactly the thing what one wants to see! And to think of it there is nothing wrong in it after all the pattern is in the eye of the beholder. Its often be repeated that Technical Analysis is not an exact science, rather it’s a game of probabilities and you would be better off if you treat Technical Analysis like that. It doesn’t matter whether you see the correct pattern or a setup, but what matters is that you follow it with good money management. Coz the crux is in the good money management…it’s this, what keeps you in the game even if you fail 6 times out of 10.
So to sum up one man’s Double Bottom can be another man’s Double Top and both can be right as long as they trade it with a plan and with STOPS! Stops let you decide what you want to relinquish and accept you were wrong in your analysis! Trading is not about being Right Always it’s about being on the Right Side and the Right Side is not about making profits it’s about protecting what you have…try and you will see profits trickling in!!!