Read the "M Top" and "W Bottom" with Marco Yi to Precisely "Escape the Top" and "Buy the Bottom"



M Top and W Bottom are common reversal patterns in technical analysis, often appearing in candlestick charts, used to judge whether the trend may shift from upward to downward or vice versa.

M Top: Also known as double top, it is a top reversal signal, indicating the end of an upward trend and a possible shift to decline.

W Bottom: Also known as double bottom, it is a bottom reversal signal, indicating the end of a downward trend and a possible shift to rise.

❚ M Top Trading Strategy

Core principle: An M shape appears at the end of an uptrend, with the right-side high point unable to make a new high and volume decreasing, signaling the exhaustion of the bulls.

Three main selling points:
1. Best selling point: When the right top forms and shows signs of reversal and decline (candlestick closes bearish, volume decreases), immediately reduce or clear positions to avoid chasing the high and getting caught.

2. Main selling point: When the price effectively breaks below the neckline (closing price more than 3% below the neckline is ideal), decisively sell all or significantly, as the pattern is officially confirmed.

3. Additional selling point: After breaking the neckline, if the price rebounds to near the neckline and encounters resistance and falls back, sell again or add short positions.

❚ W Bottom Trading Strategy

Core principle: A W shape appears at the end of a decline, with the right-side low point no longer making new lows and volume decreasing, signaling the exhaustion of the bears.

Three main buying points:
1. Testing buy point: When the right bottom forms, and the price stabilizes and approaches the level of the left bottom, lightly buy (position control at 20-30%) to catch the reversal.

2. Main buy point: When the price effectively breaks above the neckline (closing price more than 3% above the neckline, with volume increase), add to positions or buy heavily, as the pattern is officially confirmed.

3. Additional buying point: After breaking the neckline, when the price pulls back to the neckline for support and then rises again, buy again or go full position.

Mastering the core of M Top and W Bottom is "Right-side Trading + Confirmed Breakout"—do not guess the top or bottom, only act when the trend reversal signals are clear, which can improve success rate and achieve precise top-selling and bottom-buying.
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