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Double top

A double top is formed by two similar highs separated by a trough. A break of that trough signals a possible bearish reversal.

After a rally, price stalls at resistance, pulls back, returns to test the same level and fails again. The two peaks don't need to match to the pip. The pattern is confirmed when price closes below the intermediate trough.

The theoretical target projects the height between the peaks and the trough below the breakout point. The second peak often comes with weaker volume or momentum, sometimes with an RSI divergence.

A classic trap: selling at the second peak before confirmation. Many double tops in the making end up as bullish breakouts.

The full lessonReversal patterns: head and shoulders, double top and double bottomSpot a head and shoulders or a double top, wait for the neckline break, measure the target and place your stop. Worked examples on EUR/USD and gold.← Full glossary