Double Top Pattern
A resistance level tested twice without breaking, signaling the end of an uptrend. Looks like an "M" on the chart.
Trading rules at a glance
- Entry
- Short on close below the neckline, or on retest of the neckline from below.
- Stop Loss
- Just above the second peak.
- Target
- Measure the distance from the peaks to the neckline and project that distance downward.
How the Double Top forms
Price reaches a peak, pulls back to form a trough, then rallies to retest the same peak and fails. The pattern completes when price breaks below the intermediate trough (the neckline).
How to trade it
- Identify a clear uptrend before the pattern.
- Confirm both peaks are at roughly the same level (within a few percent).
- Draw the neckline across the intermediate trough.
- Wait for a clean break and close below the neckline before shorting.
- Volume should ideally decline on the second peak and surge on the break.
Common mistakes to avoid
- Entering between the two peaks before confirmation.
- Ignoring strong underlying trends — double tops fail in strong bull markets.
- Confusing a double top with simple consolidation.
Real-world example
GBP/USD formed a clear double top near 1.3500 in mid-2018, with peaks in April and July of that year. The break below the 1.3200 neckline triggered a decline to 1.2660 by late August.
Best timeframes
The Double Top works best on 1H, 4H, Daily charts. It can appear on lower timeframes but signal reliability drops significantly below the 1-hour chart.
Related patterns
Head and Shoulders
Three-peak formation that marks the end of an uptrend and the start of a downtrend. One of the most reliable reversal patterns in technical analysis.
Inverse Head and Shoulders
Mirror image of the head and shoulders pattern. Forms at the end of a downtrend and signals a bullish reversal.
Double Bottom
Two troughs at similar support levels followed by a break above the intermediate peak. Looks like a "W" on the chart.
Rising Wedge
Price grinds higher between two upward-sloping trendlines that converge. Typically breaks downward.