Two consecutive peaks at roughly the same price level, separated by a clear trough, signal buyer exhaustion. Trade the neckline break for measured-move profit targets.
Indicators Used
Swing High/LowRSI
Rules
📉 Short Entry
- Two peaks within 3-5% of each other in price
- Clear trough between peaks (minimum 3% decline)
- Second peak fails with bearish reversal candle
- RSI divergence: peak 2 RSI < peak 1 RSI (ideal but not required)
- Enter short on break below neckline (trough low)
- Stop: above the second peak
- Target: pattern height projected below neckline
⚙️ Configuration
- // Double Top Config
- Peak tolerance: within 3-5%
- Trough depth: minimum 3% decline
- Confirmation: neckline break close
- Target: measured move from pattern height
<3-5% apart
Peak Tolerance
Measured Move
Target
💡 Pro Tip
Watch for the 'M' shape to be symmetric. A jagged, uneven second peak (especially with higher high) isn't a double top. It's trend continuation with a pullback. Symmetric peaks mean equal buying pressure got absorbed twice, which is the thesis.