Double top and double bottom

Two attempts at the same level, both fail

A double top is what it sounds like. Two peaks at roughly the same price level with a valley between them. Buyers pushed price up to a level, sellers stopped them, price pulled back, buyers came back and tried again, sellers stopped them at the same level. The visual on a chart looks like a capital letter M. Two humps. Same height. The story behind the shape is simple. Demand failed at a level twice. That is meaningful information.

The trigger is the neckline. In a double top, the neckline is the swing low between the two peaks. When price closes below that low, the pattern is said to be confirmed. Before that close, you only have two highs at a level. Plenty of charts print two highs and never break the neckline. They simply chop sideways or grind back up to a new high.

A double bottom is the mirror image at the bottom of a downtrend. Two valleys at roughly the same level with a peak between them. The shape looks like a capital W. The neckline in a double bottom is the swing high between the two valleys. Trigger is a close above that high. Same logic, flipped. Sellers tried to push price lower twice and failed both times at the same level.

One thing to watch out for. A double top on a 5-minute chart inside a larger uptrend is not the same animal as a double top on the daily chart at a major resistance level. The shape is identical but the meaning is not. Higher timeframe context drives the reliability. We are going to keep saying that across this whole chapter because it is the single most useful thing to remember about classical patterns. The shape is a clue. The location and the trend alignment do the heavy lifting.

Recap: double top is two peaks at the same level, confirmed on a close below the neckline. Double bottom is the same flipped. M for top, W for bottom. Location on the higher timeframe matters more than the shape itself, and the pattern only becomes a signal once the neckline gives way on a real close.