Pattern 1 of 18: all patterns
Double top and double bottom
Price rallies to a high, pulls back, rallies to the same high again and fails. The pullback low between the two tops is the neckline. A close below it completes the pattern. A double bottom is the same shape upside down.
The second test shows that buyers could not push through the level that stopped them the first time. When the neckline breaks, the traders who bought the second test are now losing, and their exits can add to the move down.
- Two swing highs within 15% of the pattern height of each other, at least six bars apart.
- A clear pullback between them (the neckline), at least two average bar ranges (ATR) deep.
- The pattern is complete only when a candle closes through the neckline. A touch is not enough.
How the alerts work for this pattern
- 1Forming
Price comes back up to the first top. The scanner shows the first top and the neckline and tells you a second top may be forming.
- 2Complete
The second top is confirmed as a swing high. The trigger line (the neckline), the stop and the target are now known.
- 3Close to signaling
Price is within a third of an ATR of the neckline.
- 4Time to act
A candle closes through the neckline.
- xCancelled
Price closes above the higher of the two tops, or the setup runs out of time (one pattern width).
The textbook trade
- Trigger
- A close through the neckline.
- Stop
- Just beyond the higher top (lower bottom), plus a small ATR buffer.
- Target
- The textbook measured move: the height from the tops to the neckline, projected from the break.
Things to watch
- Equal highs attract stop orders above them. A quick spike above the first top that closes back below is common, so wait for the neckline close.
- A double top inside a strong uptrend on a higher timeframe is often just a pause.
- If the second top is much higher than the first, it is no longer a double top. The scanner allows a 15% difference.
Described by Richard W. Schabacker in Technical Analysis and Stock Market Profits (1932) and made standard by Robert D. Edwards and John Magee in Technical Analysis of Stock Trends (1948). Thomas Bulkowski measured thousands of examples in Encyclopedia of Chart Patterns (first edition 2000).
On our charts
Real detections by the scanner on our own price data (2026-08-01 to 2026-10-19), with the alerts it sent. Times are New York time. Some worked and some did not.
- 1Forming2026-10-18 22:15 NYprice is back at the high of 4187.7; a second top here, then a close through 4165.6, would complete it
- 2Complete2026-10-19 02:45 NYcomplete; the trigger is a close through the neckline at 4165.6
- 3Close to signaling2026-10-19 06:00 NYclose to the trigger at 4165.6
- 4Time to act2026-10-19 06:45 NYclosed through 4165.6: entry 4165.2, stop 4188.9, target 4143.2
- 5Result2026-10-19 10:15 NYtarget (+0.93R)
- 1Forming2026-10-19 07:45 NYprice is back at the low of 29473.8; a second bottom here, then a close through 29573.7, would complete it
- 2Complete2026-10-19 08:15 NYcomplete; the trigger is a close through the neckline at 29573.7
- 3Close to signaling2026-10-19 08:15 NYclose to the trigger at 29573.7
- 4Time to act2026-10-19 09:15 NYclosed through 29573.7: entry 29582.0, stop 29463.0, target 29684.8
- 5Result2026-10-19 10:15 NYstop (-1.00R)
Education, not advice. A pattern describes what many traders watch for; it does not predict what price will do. The textbook stop and target are reference levels, not instructions. Trading involves risk.
Trade your way. The Desk backs the move.
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Trading involves risk. This page is education, not advice; examples come from past data.