Track your progress
To save this lesson to your Academy progress, join the free TradersLink Discord and log in with your Discord account.
Log in with DiscordDouble Top
Best suited for: day trading and swing trading.
A double top forms when price tests a similar resistance area twice and fails to hold above it. The second rejection matters because it shows buyers struggled at the same area again.
The pattern is cleaner when both highs are easy to see and the pullback between them gives the chart a clear support area to watch.
What It Is
A double top forms when price tests a similar resistance area twice and fails to hold above it.
- First test into resistance.
- Pullback from the first test.
- Second test near the same area.
- Neckline or support area below.
- Possible support break or failed breakdown.
Review the two resistance tests, the pullback between them, and the level price would need to lose for the pattern to matter.
Pattern Structure
The pattern shows repeated resistance. The next review is whether price breaks, rejects, or stays trapped near that area.
- First test into resistance.
- Pullback from the first test.
- Second test near the same area.
- Neckline or support area below.
- Possible support break or failed breakdown.
Context That Matters
Double tops matter most after a push into resistance or an extended move where buyers may be running out of clean progress.
- Support and resistance quality.
- Trend before the pattern.
- Volume during formation and attempted break.
- Distance from invalidation.
- Liquidity, spread, and slippage.
- Catalyst, filing, or market context where relevant.
When It Can Mislead
Double tops mislead when traders call the pattern before the second rejection and support break are clear.
Example Chart Read
A stock tests high of day, pulls back, then tests the same area again and rejects. The useful read is whether the second test was weaker and whether price later lost or reclaimed the support between the two highs.
Common Mistakes
One common mistake is seeing the pattern before it is actually formed.
Another mistake is entering late after the clean risk area has passed.
Traders also make mistakes when they ignore volume and nearby levels.
Another mistake is holding after the pattern fails.
A final mistake is using the pattern label to justify a reactive trade.
Related Lessons
Key Takeaway
A double top is repeated resistance plus follow-through context, not two similar highs by itself.
FAQ
What is Double Top?
A double top forms when price tests a similar resistance area twice and fails to hold above it.
What weakens a double top?
It weakens if price reclaims the resistance area and starts holding above the prior highs.
What context matters most?
Levels, trend, volume, liquidity, risk, and follow-through matter most.
Why do these trades fail?
They often fail because entries are late, volume fades, a key level fails, or the pattern was forced.
How should it be reviewed?
Review pattern quality, entry timing, volume, level behavior, invalidation, and whether the plan was followed.
What should this pattern be compared with?
Compare it with resistance quality, the depth of the middle pullback, volume on each test, and whether price loses the support between the tops.