Double Top
Chart PatternsA bearish reversal pattern where the price reaches the same high twice with a pullback in between, forming an "M" shape. The break below the middle trough confirms the reversal.
What Is a Double Top?
The double top is a common bearish reversal pattern shaped like the letter M. The price rallies to a Resistance level, pulls back, rallies again to approximately the same level, and then declines. The two peaks do not need to be at the exact same price, but they should be close (within 1-3% of each other).
The pattern reflects two failed attempts by buyers to push price above a resistance zone, signaling that demand is exhausted at that level.
How to Trade a Double Top
The confirmation point is the "neckline," which is the low between the two peaks. When price breaks below this level on EUR/USD, enter short with a stop above the two peaks. The measured target equals the height of the pattern (from peaks to neckline) projected downward from the break point.
Many traders also watch for a retest of the broken neckline from below before entering, which often provides a better entry.
Filtering False Signals
A double top is more reliable when the two peaks are separated by at least several candles (showing a genuine pullback between them). If the peaks are too close together, the pattern may just be a brief consolidation rather than a true reversal. Volume declining on the second peak compared to the first adds confirmation that buying interest is waning.
Related Terms
Double Bottom
A bullish reversal pattern where the price reaches the same low twice with a bounce in between, forming a "W" shape. The break above the middle peak confirms the reversal.
Triple Top
A bearish reversal pattern where the price reaches the same resistance level three times, failing each time. The break below the support connecting the pullback lows confirms the pattern.
Head and Shoulders
A bearish reversal chart pattern with three peaks where the middle peak (head) is the highest and the two outer peaks (shoulders) are roughly equal. The neckline break confirms the reversal.