Double Top Practice
A double top is two failed attempts at the same high — an "M" shape that warns buyers are running out of room. Train to wait for the neckline break instead of front-running it.
A double top forms when price rallies to a high, pulls back, then rallies again to roughly the same level and fails. The low between the two peaks defines the neckline; a decisive close below it confirms the reversal and projects a target equal to the height of the pattern.
How to spot it
- ✓ An uptrend leads into the first peak.
- ✓ Two peaks form at a similar level — they do not need to be identical.
- ✓ The dip between them sets the neckline.
- ✓ Confirmation is a close below the neckline, not the second peak alone.
- ✓ Volume often fades on the second peak — a useful tell.
⚠️ Common mistake
Shorting the second peak before the neckline gives way. Two highs at a level are common in a healthy uptrend; without the neckline break it is just a pause, not a top.
Start with a worked example
Decide for yourself first, then open the explanation. The three questions below ask for the same judgement.
Which chart pattern is shown below?
- A Head & Shoulders
- B Double Bottom
- C Double Top
- D Rising Wedge
Show the answer and why
Answer: C. Double Top
Two peaks at almost the same height, with the first marginally higher by an amount small enough to ignore, and a pullback between them. The overall outline is an M.
Why not a head and shoulders: that pattern needs three peaks with the middle one highest. Here there are only two and they are level, so there is no head. Why not a rising wedge: in a wedge the highs and the lows both step up, while in this chart the second peak does not exceed the first and price heads lower afterwards.
The same caveat applies. Two peaks at the same level only tell you price could not get through that area. What turns it into a reversal is the subsequent break of the low between them. The right-hand side of this chart does break it, but when the pattern is still forming, the right-hand side is exactly what you cannot see.
Three questions on this pattern
Not three of the same chart — the other options are the patterns this one gets mistaken for.
Which chart pattern is this?
FAQ
How close do the two peaks need to be?
Roughly the same level — within a small percentage. Real patterns are imperfect; the neckline break matters more than identical peaks.
What target does it imply?
Measure the height from the peaks to the neckline and project it down from the break. It is a rough guide, not a guarantee. This page is practice, not advice.