Technical & Chart AnalysisM top
Double Top
A bearish reversal pattern of two peaks at roughly the same level, confirmed when price closes below the trough between them.
What Double Top means
A double top appears after an advance when price reaches a high, retreats to an interim low, then rallies again and stalls at approximately the same high before turning down. The two peaks need not match exactly; most practitioners allow a small tolerance, and a marginally higher second peak that fails immediately is still commonly counted. The low between the peaks forms the neckline, and the pattern is only confirmed by a decisive close below that level, ideally accompanied by an expansion in participation.
The measured objective is taken by projecting the height from the peaks down to the neckline below the breakdown point. Stops are usually placed above the second peak. The pattern is more persuasive when the two peaks are separated by a meaningful number of periods and when a momentum oscillator shows lower highs against the equal price highs, a bearish divergence. The honest caveat is that failed double tops are frequent: price often breaks the neckline briefly, traps sellers, and resumes the prior uptrend.
Worked example
GBP/USD tops at 1.2790, falls to 1.2690, then stalls again at 1.2785. A close below 1.2690 confirms the pattern and gives a measured target near 1.2590, roughly 100 pips of height projected down.
Related terms
- Double BottomA bullish reversal pattern of two troughs at roughly the same level, confirmed when price closes above the peak between them.
- Head and ShouldersA three-peak reversal pattern with a higher middle peak, completed when price closes beyond the neckline joining the intervening lows.
- ResistanceA price area where selling interest has previously been strong enough to stop or reverse an advance.
- BreakoutA move of price decisively through an established support, resistance or consolidation boundary.
- DivergenceA disagreement between price and an indicator, where one makes a new extreme that the other fails to confirm.
Frequently asked questions
What does Double Top mean in forex trading?
A bearish reversal pattern of two peaks at roughly the same level, confirmed when price closes below the trough between them.
How does Double Top work in practice?
The measured objective is taken by projecting the height from the peaks down to the neckline below the breakdown point. Stops are usually placed above the second peak. The pattern is more persuasive when the two peaks are separated by a meaningful number of periods and when a momentum oscillator shows lower highs against the equal price highs, a bearish divergence. The honest caveat is that failed double tops are frequent: price often breaks the neckline briefly, traps sellers, and resumes the prior uptrend.
What is an example of Double Top?
GBP/USD tops at 1.2790, falls to 1.2690, then stalls again at 1.2785. A close below 1.2690 confirms the pattern and gives a measured target near 1.2590, roughly 100 pips of height projected down.
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