A double top looks like the letter M: price hits the same high twice and fails both times.
How to trade it
- Spot two highs at roughly the same level after an uptrend.
- Mark the neckline: the low between the two tops.
- Wait for a close below the neckline.
- Target = the height from the tops to the neckline, projected down.
The double bottom
The W: two lows at the same level. Bullish when price closes above the neckline.
Wick says
Twice is a coincidence, but a failed break of the same high twice tells you buyers are running out of breath.
Key takeaways
- Double top = bearish; double bottom = bullish.
- The neckline break is the trigger.
- Target = pattern height from the neckline.