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Double top and double bottom

Chart patterns · Intermediate → Advanced · 8 min read
You will learn to
  • Rules for a valid double top/bottom
  • Confirmation and the measured move
  • Failure modes and the honest result

The shape

necklinetop 1top 2swing low

Two highs at about the same price with a swing low between them: buyers failed twice at the same level. The swing low is the neckline. The double bottom is the mirror.

Rules used here

  • The two tops within about 0.6 ATR of each other.
  • At least 10 candles apart — two touches a few candles apart is just a wick cluster.
  • The dip between them at least 1.5 ATR deep.
  • Confirmed by a close through the neckline. Before that it is a range.

Target, stop, failure

Measured move: the height from the tops to the neckline, projected down from the break. Stop (tested rule): just beyond the higher of the two tops, plus 0.2 ATR. Common failures: the break is a fakeout and price closes back above the neckline; or the second top was a sweep of the first and price runs higher — remember equal highs are a liquidity magnet.

✓ What our backtest found
4H, unseen data 2024–26 (stop beyond the pattern, 2R target, after fees): double top +0.38R per trade over 178 trades (95% range +0.12 to +0.65); double bottom +0.13R over 165 (not significant alone).
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Check yourself

1. When is a double top confirmed?
  1. At the second top
  2. On a close below the swing low between the tops ✓
  3. When RSI turns down
Before the neckline breaks, it is just two highs in a range.
2. Where does the tested rule put the stop on a double top?
  1. Just above the higher top (+0.2 ATR) ✓
  2. At the neckline
  3. 1% above entry
Above the tops the pattern is invalid.
3. Why can equal highs fail as a top?
  1. They are too obvious — stops above them attract a sweep ✓
  2. They never fail
  3. Volume is always low
Liquidity above equal highs is a magnet.

Terms in this lesson

Double top / bottom
Two equal highs (lows) with a swing between.
Practise it on real charts. In the app, this lesson comes with real examples (reveal what happened next), a graded drill and the track test. Open the Academy in NexusCore — free →
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