Section 3 · Chart Reading
Double Top & Double Bottom
Two attempts at the same level — and a failed breakout
Resistance and Support Holding Twice
The double top and double bottom are among the most common and reliable reversal patterns. A double top forms after an uptrend: price reaches a resistance level, pulls back, rallies a second time to approximately the same high, and fails again. The "neckline" is the support level at the bottom of the pullback between the two peaks. When price breaks below the neckline with conviction, the double top is confirmed and a bearish reversal is signaled. The distance from the peaks to the neckline equals the expected move downward from the neckline. A double bottom is the mirror image: two troughs at the same support level, with a neckline at the high between them. Breaking above the neckline confirms the bullish reversal. The key insight is that two failures at the same level demonstrate that buyers or sellers definitively lack the strength to break through.
3 things to know
Double top: two peaks at resistance; neckline break below confirms bearish reversal
Double bottom: two troughs at support; neckline break above confirms bullish reversal
Measured move: distance from peak to neckline (or trough to neckline) equals expected move after breakout
Dive Deeper
Key vocabulary — tap each card
Practice
Double Top / Double Bottom: True or False?
Statement 1 of 4
A double top is confirmed the moment the second peak forms at the same resistance level.
Did you know?
Common mistake: many traders enter a short position on the second peak of a double top before the neckline breaks. This is premature — without neckline confirmation, you're fighting a trend that hasn't officially reversed yet, and you'll be stopped out repeatedly.