What is a double top pattern (and a double bottom)?

A double top is an M: price rises, stalls, pulls back, rallies to about the same high and fails again; the low between the peaks is the neckline. A double bottom is the W at the end of a decline: two lows near the same price, with the neckline through the bounce high between them. The drawing at the top of this page shows both, with their breaks and target brackets.

Both are reversal patterns: they suggest the trend before them has run out of buyers (a top) or sellers (a bottom). They belong to the chart patterns family, next to the head and shoulders, which has three peaks.

Double top
Two peaks at about the same price after an uptrend, with a pullback low between them. Bearish only after a close below that low.
Double bottom
Two lows at about the same price after a downtrend, with a bounce high between them. Bullish only after a close above that high.
Neckline
The line through the swing between the two tests: the low between the peaks of a double top, or the high between the troughs of a double bottom.
Measured move
The usual target convention: the height from the peaks (or troughs) to the neckline, projected beyond the break. An estimate, not a forecast.
Retest
A return to the broken neckline from the other side: old support acting as resistance, or old resistance as support. Often price never comes back.

What makes a real double top or double bottom?

Two touches of the same level happen all the time. A real pattern needs the four things below, and traders most often skip the first and the last.

Location matters too: a double bottom on a support level traders already watch, such as the prior day’s low or a higher-timeframe level, deserves more attention than one in the middle of nowhere.

Volume and momentum add evidence, not proof. Classic descriptions expect lighter volume on the rally to the second peak of a double top and rising volume on the break; in a double bottom, lighter selling into the second low and stronger buying off it. In the drawing below, price makes a slightly lower low while the RSI makes a higher low: a bullish divergence, a sign that sellers pushed with less force the second time.

  • A prior trend to reverse: an uptrend before a double top, a downtrend before a double bottom. Two equal highs in the middle of a sideways range are just a range.
  • Two tests of the same level. Classic descriptions, written for daily charts, accept a second peak or trough within about 3% of the first, usually one to three months apart. On intraday charts the idea is the same at a smaller scale: two tests you would call one level.
  • A clear swing between the tests. That pullback low (in a top) or bounce high (in a bottom) is the neckline; a shallow wiggle makes a weak one.
  • A close beyond the neckline. Until then, you have a level that has held twice, not a pattern.

Turn your phone sideways to read the drawing. Tap to close.

A hand-drawn chart: price makes a lower low while the RSI panel below it makes a higher low, a bullish divergence.

Confirmation: wait for the close beyond the neckline

The neckline close is the whole difference between a pattern and a guess. Until a candle closes below the neckline of a double top, buyers still hold the low between the peaks, and the “pattern” is only resistance that has held twice. The same goes for a double bottom and a close above its neckline.

Hypothetical double top on a 1-hour chart: a stock climbs from $74.00 to a first peak at $84.00, pulls back to $81.00 and rallies to $83.70, about 0.4% short of the first peak, where it stalls again. $81.00 is the neckline. The next drop wicks to $80.80, but the candle closes at $81.20: not confirmed, and no trade. The candle after that closes at $80.70. Now the double top is complete.

Use closes on the timeframe you trade, and decide in advance how far beyond the line a close must be; some classic descriptions add a set percentage or a number of bars the break must hold. A break on rising volume adds weight; a quick close back inside the pattern takes it away.

Three ways to enter a double bottom

The drawing below shows the three standard entries on a double bottom (for a double top, flip everything). Hypothetical numbers on a 15-minute chart: after a decline, a first low at $40.00, a bounce to $43.00 (the neckline) and a second low at $40.20. The pattern stop is $39.70, below both lows.

None of the three is best; each trades price for confirmation. Pick one in your plan before price gets there, and don’t switch mid-trade.

  1. Aggressive, at the second low. A candle closes back up at $40.60 off the second low and you buy: $0.90 of risk to the stop and the best price of the three. But nothing is confirmed yet, and if the downtrend simply resumes, you take the stop.
  2. Breakout, on the close above the neckline. A candle closes at $43.30. The pattern is confirmed, but the stop below the lows is $3.60 away and the $46.00 measured target only $2.70 above: worse than 1:1. Traders using this entry trade smaller or use a closer stop below the breakout candle, which retests hit more often.
  3. Retest, when price comes back down to the neckline and holds. Price pulls back to $43.00 and a candle closes back up at $43.20; the stop goes under the retest low at $42.50, $0.70 away. You get confirmation and a tight stop, but many breakouts never retest.

Turn your phone sideways to read the drawing. Tap to close.

A hand-drawn double bottom with three numbered entry options: 1, aggressive, at the second low; 2, breakout, on the close above the neckline; 3, retest, when price comes back down to the neckline and holds; a dotted stop sits below the two lows.

The measured-move target, the stop and position size

The usual target is the measured move: take the height from the peaks to the neckline and project it beyond the break. In the double top above, $84.00 − $81.00 = $3.00, so the target is $81.00 − $3.00 = $78.00. In the double bottom, $43.00 − $40.00 = $3.00 added to the neckline gives $46.00. It is a convention, not a forecast: price often stops short of it or runs past it.

So check the chart between the entry and the target. If the double bottom’s prior swing high at $45.40 sits in the way, a target just under it, at $45.30, is more honest. The retest entry then risks $0.70 to make $2.10, about 1:3, and still clears a 1:2 minimum like the one in the drawing below. See the risk-reward ratio guide.

The stop goes where the pattern is wrong: below both lows of a double bottom, above both peaks of a double top, plus a small buffer; a stop beyond the retest is tighter and gets hit more often. In the double top, a short at $80.70 with a stop at $84.20 risks $3.50 to make $2.70, worse than 1:1, so a trader either waits for a retest of $81.00 from below or skips it. See stop loss and take profit for buffers.

Size comes from the stop. Risking 1% of a $10,000 account, or $100, allows 111 shares on the aggressive entry ($100 ÷ $0.90), 27 on the breakout with the stop below the lows ($100 ÷ $3.60) and 142 on the retest ($100 ÷ $0.70). Same dollar risk, different share count; the position size calculator does the math. A gap can still fill a stop beyond its price.

Turn your phone sideways to read the drawing. Tap to close.

A hand-drawn trade plan: an entry line, a red box down to the stop labeled risk = 1R, a green box up to the target labeled reward = 2R, and a note reading R:R = 1:2.

Triple tops and triple bottoms

A triple top adds a third test of the same high, and a triple bottom a third test of the same low. The confirming line is the lowest low between the peaks (or the highest high between the troughs), the target is measured the same way, and the stop goes beyond all three tests. Before the third test the pattern looks like a double top, and three equal highs can also be the top of a range or an ascending triangle, so the close beyond the line decides, not the number of peaks.

When a double top fails and breaks out higher

The most common failure: the “second peak” is not a peak at all. Same hypothetical stock: you short at $83.50 after a red candle closes off the second test, stop at $84.20 above both peaks ($0.70 of risk), before the neckline breaks. Instead a candle closes at $84.40, above both highs, and your stop fills: −1R, planned. In the drawing below, price then comes back to that old resistance, holds it as support and prints a buy: the same chart has become a breakout.

A second failure comes after confirmation: price closes below the neckline, you short, and the next candles close back above it. The break did not hold, so exit rather than hope. Double bottoms fail the same two ways, mirrored: a break below both lows, or a neckline breakout that closes back under.

Why it happens: two equal highs are also the top of a range, and in a strong uptrend dips get bought. Trading against the prior trend before confirmation is the riskiest way to play this pattern.

Turn your phone sideways to read the drawing. Tap to close.

A hand-drawn chart of the end of a range: a candle closes above resistance, price comes back to it (retest, old resistance = new support) and a buy triangle prints; an earlier short at the top of the range is crossed out, with a note reading: a close outside ends the range.

How to trade double tops and bottoms, step by step

On TradingView, mark the two tests and the neckline with the Horizontal Line tool before price gets there, and use the Long Position or Short Position tool to see each entry’s risk/reward. Then work through the list below.

UpTickFlow, our own invite-only TradingView indicator, does not detect double tops or any other chart pattern, so weigh this accordingly. It works on the same confirmation-first idea: it waits for a candle to close at a level, draws the entry, stop and target before the trade, scores the setup from 0 to 100 and stays quiet in chop. Use it as a second check, not a pattern scanner.

  1. Check the prior trend: up before a double top, down before a double bottom.
  2. Mark both tests and the neckline on closed candles, and note whether the level is one other traders watch.
  3. Choose your entry style (aggressive, breakout or retest) before price gets there.
  4. Wait for the candle to close; a wick through the neckline is not a break.
  5. Put the stop where the pattern is wrong, measure the target and check the next level in its way.
  6. Skip the trade if the reward does not pay for the stop; otherwise size it so a stop-out costs a small, fixed amount.
  7. Exit if price closes back inside the pattern.