Double top and double bottom
Price hit the same spot twice and could not get through. The second time it turns more often than not.
Double top and double bottom — what it is?
A double top is two highs at roughly the same level with a pullback in between. A double bottom is the mirror image made of two lows.
Classic analysis reads it as weakness: one side tried twice to push through the level and failed. The entry offered is on the break of the level between the peaks.
In Smart Money terms two equal extremes are EQH or EQL — a direct pointer to where the stops are. The pattern is less a reversal signal than a liquidity marker.
Double top and double bottom — how it is built?
Peaks count as equal if they differ by a fraction of the daily range. The flatter they look, the more stops sit behind them — and the higher the odds price goes there before it turns.
Double top and double bottom — common mistakes
Entering on the break of the level between the peaks along with the crowd.
Treating the second peak as a guarantee of reversal: often it is broken straight through.
Failing to tell genuinely equal highs from merely similar ones.
Forgetting that an entry only makes sense after liquidity is taken and structure shifts.
Related to
Glossary
- double top
- two highs at the same level.
- pullback
- a corrective move inside the trend.
- double bottom
- two lows at the same level.
- equal highs
- two or more highs at the same level. Orders pile up under and above them.
- equal lows
- the mirror construction.
- liquidity
- a cluster of pending orders and stops in a particular zone. The fuel for large capital to move.
Test yourself
Which chart shows a double bottom?
Correct. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →
Not this one. The right answer is the other chart. The app has tasks like this in every lesson — 119 lessons on real charts. Solve in the app →