Double Top / Double Bottom

A Double Top is a bearish reversal pattern formed when price rallies to a prior high, fails to exceed it, and reverses, producing two peaks of approximately equal height separated by an intermediate trough (the "neckline"). The Double Bottom is the bullish mirror: two troughs of equal depth separated by an intermediate peak.

Pattern completion requires a decisive close through the neckline in the direction opposite the two peaks (for Double Top) or troughs (for Double Bottom). Before that break, the pattern is only a candidate, many "Double Tops" resolve as continuation triangles or trend resumption. Volume signature helps: ideally, the second peak forms on lower volume than the first (showing declining buyer conviction), and the neckline break occurs on rising volume. The target is typically projected as the distance from peaks to neckline, extended downward from the neckline break. Stops go above the pattern's highest peak.