Double Top & Double Bottom Explained
A double top is two failed attempts at the same high (an 'M'); a double bottom is two failed attempts at the same low (a 'W'). Both signal a trend reversal.
Two tests that fail
A double top forms when price rallies to a high, pulls back, then rallies to roughly the same high and fails again — an 'M' shape. The market tried twice to push higher and couldn't. A double bottom is the 'W' version at the bottom of a downtrend.
The dip between the two peaks (or the peak between the two troughs) sets the neckline. The equal highs also stack a pool of stops just above them, so the second test often sweeps the first before reversing.
Confirmation and target
The pattern completes on a close through the neckline, not on the second touch. The measured target is the height of the pattern projected from the neckline break.
The strongest version has the second top slightly higher (a sweep of the first high) then rejects — false breakout plus structure break in one. Watch volume: it typically drops on the second test.
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Play Chart Bound free → Try today's Call the Candle →Frequently asked questions
What is a double top pattern?
Two rallies to roughly the same high with a pullback between them, forming an 'M'. It signals that buyers have failed twice and a reversal lower may follow.
When is a double top confirmed?
When price closes below the neckline — the low of the pullback between the two peaks. The second touch of the high alone is not confirmation.
What is the difference between a double top and double bottom?
A double top (M) forms at the top of an uptrend and signals a move down; a double bottom (W) forms at the bottom of a downtrend and signals a move up.