Home › Guides › Chart patterns

Double top and double bottom: the test that confirms them

Price hits the same ceiling twice and turns down both times. Looks like a double top. But the 2 peaks aren't what confirms it. The dip between them is.

Beginner guide · 7-minute read · Updated 2026-10-21

What a double top looks like

It's the letter M. It forms after price has been rising.

1. First peak. Price rises and turns down.
2. The valley. Price dips, then finds a floor and bounces.
3. Second peak. Price rises back to about the same height as the first peak. It stalls and turns down again.
4. The break. Price falls back to the valley and closes below it.

Step 4 is the one that matters. Without it, you don't have a double top yet.

What a double bottom looks like

It's the letter W. It forms after price has been falling.

1. First low. Price falls and bounces.
2. The peak in the middle. The bounce stalls and turns down.
3. Second low. Price falls back to about the same floor and bounces again.
4. The break. Price rises back to the middle peak and closes above it.

Everything below works for both. Just flip it.

The valley is the whole pattern

Here's the part most guides skip.

Two peaks at the same height on their own just mean one thing: Resistance held twice. That happens in uptrends all the time. Price pauses at a ceiling, dips, and then breaks through on the third try.

The valley is different. It's the last low the uptrend made. In plain words, it's the last place price turned back up. While price stays above it, the uptrend's lows are still intact.

When a candle body closes below the valley, the uptrend has failed to make a new high and broken its last low. That's the real signal. It's the same idea as a Change of character.

The peaks don't need to match exactly

Real charts are messy. The second peak is rarely the exact same price as the first.

• A bit lower is common. Buyers ran out of push sooner.
• A bit higher is common too. Price pokes just past the first peak, then drops back. That poke often runs through the Stop loss orders of people who sold at the first peak. See liquidity sweeps explained.

Think in zones, not exact lines. If both peaks sit inside the same small area, that's close enough. See support and resistance.

What about a triple top?

Sometimes price hits the ceiling three times. That's a triple top (or triple bottom when flipped). The rule doesn't change: the pattern only finishes when a body closes past the lowest valley between the peaks.

Each extra touch can make a level stronger. It can also wear it out, because the sellers there get used up. So the break still decides.

Where it matters

• After a real trend. A double top in the middle of a sideways range is just the range. See range trading explained.
• At a level the bigger chart shows. Two peaks right at a weekly ceiling carry more weight than two peaks in empty space.
• With the bigger trend turning, or at least flat. Fighting a strong daily uptrend with a 5-minute double top is a hard way to trade.

Where a stop would logically go

For a double top, the logical stop sits just above the higher of the two peaks. If price climbs past both, the "ceiling held twice" story is wrong.

For a double bottom, it sits just below the lower of the two lows.

That stop is often wide, because the pattern's height can be large. So many traders wait for a retest. After the valley breaks, price often comes back up to it and stalls. An old floor becomes a new ceiling. A stop just above that retest high is tighter.

Either way, the size follows from the stop, not the other way round.

A worked example

An illustration, not a real trade.

A double bottom on a daily chart:

• First low at 1.0800. Bounce to 1.0950.
• Second low at 1.0810. Bounce again.
• A daily body closes at 1.0960, above the middle peak.

Account 10,000 units, risk 1% = 100 units.

• Wide stop: below the lower low, at 1.0790. Distance = 0.0170, or 170 Pips.
• Tighter stop after a retest: price dips back to 1.0955 and holds. Entry 1.0960, stop 1.0930. Distance = 30 pips.

The tighter stop lets you take more size for the same 100 units at risk. The wide stop gives the idea more room. Neither is "right". Pick one in your plan and stick to it. The position size calculator turns the pips into a size. A math example, not a promise. Both versions can lose.

What failure looks like

It fails often. That's why the stop comes first.

• The valley holds. Price drops to it, bounces, and breaks above both peaks. The "double top" was just a pause before a Breakout.
• The break snaps back. A body closes below the valley, then price closes back above it. See breakout vs fakeout.
• It turns into a range. Price keeps bouncing between the peaks and the valley. No trend either way.

Common mistakes

• Trading the second peak. Selling the moment price touches the old high. You're guessing it will hold.
• Ignoring the valley. Calling it a double top before the break.
• Demanding a perfect match. Skipping a good pattern because the peaks are 3 pips apart.
• Peaks too close together. Two candles side by side aren't two peaks. Give it space: clear dips between.
• No trend before it. Nothing to reverse.

Try it today on TradingView

About 15 minutes.

1. Open a daily chart. Find an obvious M or W from the past by eye.
2. Mark the two peaks (or lows) and the valley between them.
3. Now open Bar Replay and go back to just after the first peak.
4. Step forward one candle at a time. When price returns to the first peak, write down: "ceiling held, waiting on the valley."
5. Did a body close past the valley? Or did price break the peaks instead? Log it.

Our free chart tool marks the turning points, including the valley, so you don't have to guess which low counts: add it on TradingView.

Questions