What Is Double Top?
A double top forms when price rallies to a resistance level, retraces, then rallies back to roughly the same level — and fails to break through. The pattern resembles the letter M.
Confirmation requires price to break below the trough between the two peaks. The measured-move target is the distance from the peaks to the trough, projected down from the breakdown point.
Double tops work because the second failed attempt at resistance signals that buyers are exhausted at that price. Sellers begin to dominate, and price reverses.
Double bottom is the mirror image — bullish reversal pattern that forms in downtrends. Same logic, flipped.
Reality check: Double tops at major resistance levels work better than at minor ones. Volume divergence between the two peaks (lower volume on the second attempt) is a strong confirming signal.
Related terms
- Double Bottom — A bullish reversal pattern where price tests a support level twice and holds.
- Head and Shoulders Pattern — A bearish reversal pattern with three peaks — left shoulder, higher head, right shoulder.
- Support and Resistance — Price levels where buying or selling pressure historically halts price movement.