Candlestick Patterns
Double Top / Double Bottom
Two peaks near the same price with a real pullback between them, and the signal doesn't confirm until the middle trough actually breaks.
Drag the test line, get the real readout
Drag the gold horizontal line up or down to where you think the two matching touches are, then release. The chart finds the two real local peaks (or troughs, on the inverse setting) closest to your line and runs the actual technical test on them: how close the two touch prices are, how deep the pullback between them was, and how many bars apart they printed. One of the bumps below is a decoy at a different height, drag onto it and the readout will tell you why it fails.
Drag the gold line and release it near the two touches you want to test.
How it works
- The two touches have to actually match. This drill requires the two peak (or trough) prices to sit within about 2.5% of each other. A "double top" where the second peak is 6% higher than the first is really just a new high, not a matching touch.
- The pullback in between has to be real. A shallow dip that barely qualifies as a pullback isn't a genuine retest, it's noise on the way to one continuous move. The middle trough needs to pull back a meaningful percentage off the peak average before the pattern counts.
- Spacing rules out both extremes. Two peaks one bar apart are the same peak with rounding error, not two separate tests of the level. Two peaks fifty bars apart may not be related to each other at all. This drill checks for a reasonable number of bars between the two touches.
- The middle level is the actual trigger, not the peaks. Spotting two matching tops or bottoms is only half the pattern. Nothing confirms until price closes back through the trough between them (or the peak between them, on the double bottom), the same level the pullback carved out.
- The measured move projects the peak-to-trough distance. Once the middle level breaks, the same vertical distance between the touch average and that middle level gets projected beyond the break. That's the target the play-forward checks against the actual bars.
Where this breaks
A shallow middle pullback passes the spacing and price tests while meaning almost nothing
Touch price and bar spacing are the two criteria traders check first, and they're also the two easiest for random price action to satisfy by accident. A pullback that only retraces a small percentage of the move to the peaks can still land inside the spacing window and produce two touches within a couple percent of each other, especially in a low-volatility stretch where the whole chart is trading in a tight band. The pattern reads clean on the surface, yet there was never much selling pressure built up at the top or buying pressure built up at the bottom, so the eventual break of the middle level tends to be shallow and short-lived instead of the full measured move this page projects. Depth matters as much as symmetry, and it's the criterion most often skipped.