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Island Top

The Island Top forms when price is isolated by two gaps - an upward gap and a downward gap.

Gap↑Gap↓IslandIsland Top: Gap up → Island isolated → Gap down → Decline

Pattern Details

Category

reversal

Success Rate

73%

Average Move

-14%

Duration

1-3 weeks

Pattern Structure

Pattern Structure
Key components that define this chart pattern
  • 1
    Upward gap: Price jumps up creating top
  • 2
    Island area: Isolated price trading
  • 3
    Downward gap: Price jumps down confirming reversal

Trading Rules

Trading Rules
Essential rules for trading this pattern successfully
  • ✓
    Enter short position when downward gap appears
  • ✓
    Volume is typically high at island
  • ✓
    Target = Height of the island
  • ✓
    Stop loss above island top
Trading Tips
  • Very rare pattern
  • Strong reversal signal
  • Also called "Island Reversal"

Statistics

Breakout Statistics
Bullish Breakout27%
Bearish Breakout73%
Performance Metrics
Average Rise+5%
Average Decline-14%
Pullback Rate11%