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Technical analysis

Double top / bottom

By Jarosław Wasiński • Published: • Updated:
A conventional candidate reversal structure with two similar highs or lows separated by a pullback. It commonly requires a defined break of the intervening extreme. Similarity, activation and invalidation need explicit criteria. Projected height is a reference target, not a guaranteed outcome or proof of stop hunting.
Example. EUR/USD peaks at 1.1050 and 1.1052 fit an illustrative three-pip tolerance; the intervening trough is 1.1000. A close below that trough activates the stated pattern. Measuring height from 1.1052 projects 1.0948 from a 1.1000 break, a reference target rather than a guaranteed outcome.

Similarity and preceding movement

State the tolerance between extremes, minimum pullback and swing-confirmation rule. Peaks need not be identical. The conventional top follows an advance; the bottom is a mirrored candidate after a decline. Context criteria form part of the tested variant, rather than reveal hidden orders or participant intentions.

Activation level

The trough between peaks, or peak between troughs, defines the reference level. A wick crossing and a close beyond it are distinct conditions. Do not record an entry before confirmation becomes available. A retest may occur or be absent; waiting also creates the possibility of missing the move.

Height and invalidation

Choose the extreme and break price used in projection and apply that convention consistently. A geometric measured move does not automatically determine the stop, size or expectancy. Returning through the level may meet a defined invalidation rule. A slightly higher second peak does not itself prove deliberate stop hunting.

FAQ

When is a double top considered complete?
That depends on the written definition, commonly including a specified break of the intervening trough.
Must the second peak have the same price?
No. Define tolerance before testing instead of widening it to fit known outcomes.

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Jarosław Wasiński

Editor-in-chief, ForexMechanics.com • Macro & FX analyst

Independent analyst and practitioner with over 20 years of experience in financial markets. Actively involved in Forex since 2007, with a focus on fundamental analysis, OTC market structure, and disciplined capital risk management.

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