In forex trading, tops and bottoms refer to key price levels where a currency pair's trend reverses. A top is the highest price point before a downtrend begins, signalling that buyers are losing momentum and sellers are taking control. Conversely, a bottom is the lowest price point before an uptrend starts, indicating that selling pressure has weakened and buyers are stepping in. Identifying these levels helps traders predict potential trend reversals and make informed decisions about entry and exit. Tops and bottoms can form as sharp peaks (in volatile markets) or rounded patterns (in gradual reversals). Traders utilise technical analysis tools, such as trendlines, moving averages, and oscillators (e.g., RSI, MACD), to identify these reversal points. False breakouts—where price briefly surpasses a top or bottom before reversing—are common, so confirmation through candlestick patterns or volume analysis is crucial. Recognising tops and bottoms is essential for strategies like swing trading and counter-trend trading, but timing them accurately requires practice. While no indicator guarantees precision, combining multiple methods improves the reliability of spotting these critical market turning points.

In forex trading, tops and bottoms refer to key turning points in price trends. A top marks the peak of an upward trend, signalling that a stock or market has reached its highest price before a potential decline. Identifying a top helps traders sell before a downtrend begins. Conversely, a bottom is the lowest point in a downward trend, indicating a potential reversal upward. Recognising a bottom allows traders to buy at lower prices before the uptrend resumes. Tops and bottoms can form as sharp spikes (V-shapes) or gradual plateaus (rounded shapes). Traders use technical indicators like moving averages, RSI, and volume analysis to spot these patterns. While predicting exact tops and bottoms is challenging, understanding these concepts helps traders time entries and exits more effectively.