Double top and double bottom: what they are and how to spot one
By Bec, futures trader and founder of Wildflower · Updated
A double top is a chart pattern with two peaks at about the same price, with a dip between them. The low of that dip is the neckline. Traders count the pattern as complete when a One bar on a price chart. It shows where price opened and closed, and the highest and lowest it reached, in one stretch of time.More in the glossary closes below the neckline. A A double top upside down: two dips at about the same price with a rise between them, complete when a candle closes above the rise’s high.More in the glossary is the same shape upside down.
What a double top is, and why it’s called that
Price rises to a peak, dips, then climbs back to about the same height and stops there again. Two tops, side by side, like the letter M. That’s a A chart pattern of two peaks at about the same price with a dip between them, complete when a candle closes below the dip’s low (the neckline).More in the glossary. The low of the dip between the peaks is called the neckline.
Traders read it as a rise that tried twice to get past one price and couldn’t. In The pattern of swing highs and swing lows on a chart. Traders use it to say whether price is rising, falling or moving sideways.More in the glossary terms, the second peak isn’t a higher high. The pattern can form on any timeframe, and it’s one of the oldest shapes in chart reading.
How to identify a double top, step by step
1. A peak after a rise
Price climbs and makes a A peak on the chart: a candle whose high is above the highs of the candles on both sides of it.More in the glossary: the first peak. Here it’s at 110.
2. A dip
Price pulls back. The lowest point of the dip is the neckline. Here it’s 104.
3. A second peak near the first
Price climbs again and stops close to the first peak. Here it’s 109.75, a quarter point lower.
4. A close below the neckline
The pattern is complete when a candle closes below the low between the peaks.
Until that close, it’s two peaks and a dip. Price can still climb through the peaks instead. That’s why many traders wait for the close below the neckline before they call it a double top.
Double top and double bottom
Double top. Two peaks at about the same price, after a rise. The neckline is the low between them. Traders call it a Falling, or expecting a fall. A bearish candle closed lower than it opened.More in the glossary pattern, and it’s complete when a candle closes below the neckline. You’ll also hear it called an M top.
Double bottom. Two dips at about the same price, after a fall. The neckline is the high between them. It’s called Rising, or expecting a rise. A bullish candle closed higher than it opened.More in the glossary, and it’s complete when a candle closes above the neckline. You’ll also hear it called a W bottom.
Thomas Bulkowski, who catalogued chart patterns in his Encyclopedia of Chart Patterns, also names the shape of each peak. A narrow, spiky peak is an Adam. A wider, rounded one is an Eve. So you may see a pattern called an Adam and Eve double top.
What counts, and what doesn’t
About the same height. The two peaks rarely match to the The smallest step a price can move. On many stock index futures that’s 0.25 of a point.More in the glossary. How far apart they can be and still count is your choice, and some traders write it down in ticks. A second peak well above the first is a higher high.
A close, not a wick. A candle that pokes below the neckline and closes back above hasn’t completed the pattern.
Space between the peaks. Two highs a candle or two apart are one peak with a wobble. Many traders want a clear dip and a number of candles between the peaks. That number is your call.
It needs a rise before it. A double top is read as the end of a rise. Two highs in the middle of a sideways range are harder to call a top.
Timeframe matters. A double top on a 5-minute chart may be a small wobble on a 1-hour chart.
What can happen after the neckline breaks
Back to the neckline. After the break, price sometimes comes back up to the neckline from below before moving on. Traders call it a retest or a throwback. Some wait for it, and some don’t.
The break fails. Price closes back above the neckline. Traders call it a failed double top.
Price can also keep falling with no retest. The pattern can’t tell you which will happen.
The measured move. An old way of measuring the pattern: take the height from the peaks down to the neckline, then mark the same distance below the neckline. Here the higher peak is 6 points above the neckline at 104, so the mark sits at 98. It’s a measurement, not a forecast. Price may never get there, or may go well past it.
Triple top and triple bottom
A triple top has three peaks at about the same price instead of two, with two dips between them. The line runs through the lows of the dips, and the pattern is complete on a close below it. A triple bottom is the same shape upside down. They’re rarer than double tops, and some traders treat them as a double top that took one more try.
Where the double top comes from
Double and triple tops were described by Richard Schabacker in the 1930s, and by Robert Edwards and John Magee in their 1948 book Technical Analysis of Stock Trends. They wrote about stocks, but the shapes are read the same way on futures, forex and crypto charts today. Edwards and Magee also warned that many pairs of peaks never go on to break the neckline. Two tops alone aren’t the pattern.
Often confused with
Head and shoulders. Three peaks, with the middle one clearly higher than the two beside it. Read about head and shoulders.
Equal highs. Two swing highs at about the same price, with no need for a neckline break. Smart money traders watch them for a different reason: stops above them. Read about equal highs and lows.
Resistance. A price where rises have stopped before. A double top is one way resistance shows up. Read about support and resistance.
Tweezer tops. Two candles next to each other with the same high. It’s a candle pattern, much smaller than a double top. Read about tweezer tops and bottoms.
A double top indicator for TradingView
Mark the pieces on a chart, to your own rules
Wildflower’s Indicator marks things on a chart from rules you describe in plain words, with every number typed by you. It can mark swing highs and swing lows, a new swing high that lands within the number of ticks you choose of an earlier one (which is how a second peak is found), and a close below the latest swing low. A whole double top, with its break tied to the low between the two peaks, isn’t one of its building blocks. If you describe one, it tells you plainly. Everything it can build, you can check on a chart for free, then add to TradingView with a step-by-step guide.
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Common questions
What is a double top pattern?
Two peaks at about the same price with a dip between them. It’s complete when a candle closes below the low of the dip, called the neckline.
Is a double top bullish or bearish?
A double top is called bearish. A double bottom is called bullish.
What is the neckline of a double top?
The lowest point of the dip between the two peaks. For a double bottom, the highest point between the two dips.
Do the two peaks have to be exactly equal?
No. They’re rarely level. How far apart they can be is your choice.
When is a double top confirmed?
When a candle closes below the neckline. A wick through it doesn’t count.
What is the difference between a double top and a triple top?
A triple top has three peaks at about the same price instead of two.
How is a double top target measured?
The measured move takes the peaks’ height above the neckline and marks the same distance below it. It’s a measurement, not a forecast.
Is an M pattern the same as a double top?
Yes. M describes the shape. A W is a double bottom.
Does a double top form on futures charts?
It forms on any candle chart, including futures, on any timeframe.