Double tops and double bottoms are simple, common reversal patterns. Their logic is intuitive, which is part of why so many traders watch them.
Double top
Price rallies to a high, pulls back, then rallies again to roughly the same high and fails. That second rejection forms an "M" shape. It suggests buyers tried twice to push higher and couldn't — a potential top.
- Confirmation — price breaks below the low between the two peaks (the "neckline").
- Stop — just above the double-top highs.
Double bottom
The mirror image: price drops to a low, bounces, drops again to a similar low and holds, forming a "W". Sellers failed to break lower twice — a potential bottom.
- Confirmation — price breaks above the high between the two lows.
- Stop — just below the double-bottom lows.
Why they work (when they do)
A level that rejects price twice shows real supply or demand sitting there. The failure to break it the second time hints the prevailing trend is exhausted.
Reading them well
- Don't pre-empt — the pattern only counts once the neckline breaks. Two touches alone aren't a signal.
- Look for confluence — the stronger the support or resistance at the level, the more meaningful the pattern.
- Mind the timeframe — patterns on higher timeframes carry more weight than ones on a 1-minute chart.
Project the height of the pattern from the breakout for a rough target, and size every trade with a clear risk/reward.
Two rejections at a level is a story about exhaustion. The neckline break is where the market agrees with it.
Education only — not financial advice.