Double Top / Double Bottom
Last updated
Last updated
Just like with indicators, we start from the most common and easy patterns. Double Top / Double Bottom are two of the most common ones. If you learn to identify them now, you will notice them on the chart all the time.
A Double Top is like an “M”-shaped formation. Price makes a run at a certain high, backs off, then takes another stab at it and fails again. That second fail hints that bulls can’t push higher, so the market might reverse downward.
A Double Bottom is the flip side — a “W”-shaped pattern. Price slides down to a low, bounces, then tries another push down but stalls again. When it can’t break that low, it suggests a possible bullish reversal.
Look at Swing Highs/Lows. Zoom out a bit on your chart. Double tops/bottoms usually stand out clearly at notable highs or lows.
Neckline. Draw a horizontal line across the midpoint between the two tops (or bottoms). This is your trigger line.
Volume Check. See if volume dips or momentum lags during the second top/bottom. That often confirms the pattern’s strength.
Confirmation. Wait for a decisive close below the neckline (for double tops) or above the neckline (for double bottoms). That’s your go-to sign the reversal is in motion.
You can jump in when the candle closes past the neckline. For a double top, that means price firmly breaks below. For a double bottom, watch for a strong break above.
Keep your stop-loss near the second top (for shorts) or near the second bottom (for longs) to give the trade room without risking too much.
Now you see why we learned indicators first?
Don’t force it. If the pattern looks sketchy, maybe it’s not a proper double top/bottom.
Volume can be your friend. Weak volume on the second top or bottom often strengthens the reversal case.
Combine with support/resistance. If your double top forms at a well-known resistance, that’s a stronger signal. Same for double bottoms on major support.
A solid double top or double bottom can give you high-conviction trades if you keep a tight plan. Keep this one in your arsenal for spotting major turning points in the market.
Simulate going short on Double Tops once price closes below the neckline, or going long on Double Bottoms once price breaks above it. Track how price moves, note where you would place stops, and compare targets to the size of the pattern.
Repeat on different symbols for variety. The more practice you have, the better you trader you become.
A classic approach is measuring the distance from the peaks (or troughs) to the neckline, then projecting that distance in the direction of the breakout. This gives you a rough price target. Watch for anything else that screams reversal — like divergences on , , or candlestick signals near the second top/bottom.
Open your backtesting platform (such as or ) and look for “M”- or “W”-shaped patterns on historical data. Mark the first top or bottom, then watch the pullback and second top or bottom. Draw a neckline between them.
