Double Top
Also known as: M pattern, Double High
Two peaks of similar height at the same resistance, separated by a trough. Shaped like an “M”. A break of the trough signals the downward reversal.
How it forms
Price fails twice at the same resistance zone and cannot make a higher high. The low between the two peaks is the trigger line.
How it is typically traded
On a break of the intervening trough (neckline) downward, ideally on a closing basis.
The height of the peaks above the trough, projected downward.
Above the second peak.
Where & when – and the limits
Requires a prior uptrend. Two peaks alone are not a signal as long as the trough holds. Watch for the break plus ideally volume; tight double tops are more prone to false signals.
Related patterns
Education, not investment advice. Chart patterns describe probabilities, not guarantees – they fail regularly. Always manage risk with stop-loss and position size.
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