Track your progress
Sign in to your TradersLink account to save this lesson to your Academy progress. Joining a Discord server is not required.
Sign inDouble Top
Best suited for: day trading and swing trading.
Two tests of similar resistance form a potential double top. A break below the pullback low between the peaks confirms the reversal pattern. 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
Two tests of similar resistance form a potential double top. A break below the pullback low between the peaks confirms the reversal pattern.
- 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.
When The Reversal Is Confirmed
The peaks identify a potential double top. The neckline is support formed by the pullback lows between the peaks. The reversal is confirmed by a break below that support, not by the repeated peaks alone. If support holds, price may still be consolidating.
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
Price rises to $5.20, pulls back to $4.80, and returns to $5.18. The two peaks suggest a potential double top. Support at $4.80 is the neckline. A later close at $4.75 breaks that support and confirms the reversal pattern. If price instead holds $4.80 and returns above the peaks, the chart has not completed a bearish reversal.
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?
Two tests of similar resistance form a potential double top. A break below the pullback low between the peaks confirms the reversal pattern.
What weakens a double top?
It weakens if price reclaims the resistance area and starts holding above the prior highs.
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.