Markets Testing Mobile All tools Multi-market scanning Alerts Backtesting Entry check Parameter search AI strategy builder Refine Pricing Learn Research Monte Carlo simulator Guides Indicator explainers FAQ About Careers Contact Sign in
GUIDE

Double top and double bottom patterns explained

Chart patterns · 5 min read

Price rallies to a high, pulls back, rallies to the same high again and turns. That is a double top, the M shape, and its mirror is the double bottom, the W. This guide is how SixOne8 finds them by rule rather than by eye, what each setting changes, and the conditions you can write on the neckline.

A double top: two swing highs at nearly the same price, the low between them drawn flat as the neckline, and the bar that closes below it highlighted
Illustrative candles. Two tops, T1 and T2, at nearly the same price, with the lowest low between them drawn flat as the neckline. The highlighted bar is where "price breaks below" the neckline would be true.

What a double top is

Two swing highs that stopped within a small distance of each other, with a dip between them. The neckline is the lowest low between the two tops, drawn flat. The neckline is the level a rule reads, and the tops are what end the pattern: a bar that trades back above them means the shape has failed.

The double bottom is the mirror — two swing lows at nearly the same price, with the highest high between them as the neckline above. Every setting and comparison below has its double-bottom form.

A swing high is a bar whose high stands above the bars either side of it, a set number of bars each way, and it is confirmed only once that many bars have closed after it. The pattern is known on the bar the second top is confirmed. The second top is compared with every earlier swing high in the look-back, newest first, not only the one before it: a dip between two tops usually has a small bounce of its own, and reading only the last swing would pair the second top with the bounce and miss the pattern.

Double top settings

Distances are multiples of ATR(14), the average range of a bar, so the same settings work on any market and timeframe.

  1. Swing strength (bars). How many bars each side a high must stand above to count as a swing — 5 by default. Larger finds fewer, larger patterns.
  2. Tolerance (x ATR). How close the two tops have to be in price to count as the same level — 0.3 ATR by default. The same distance says how near a retest has to come to the neckline. Smaller finds fewer, neater patterns.
  3. Min depth (x ATR). How deep the dip between the tops must be — 2 ATR by default. A shallow dip is two equal highs, not a double top.
  4. Max pattern age (bars). How many bars the pattern may span, and how long it stays live waiting for the neckline to break, both counted from the first top — 100 by default.
  5. Break distance (x ATR). How far past the neckline a bar must close to count as breaking it — 0 by default, so any close past it counts.
  6. After a failed break. If price breaks the neckline and closes back across it within the retest window, Watch again (the default) keeps the pattern; End the pattern treats the first break as its last.

The retest comparisons add a retest window: 10 bars by default after the break.

How to use double tops and bottoms in a strategy

These are the comparisons SixOne8 offers, in the builder's own words, each with a double-bottom form.

  1. Double top forms. True only on the bar the second top is confirmed, within the tolerance of an earlier one and with a dip deep enough between them.
  2. Price breaks below. Price closed below the neckline, having been on or above it the bar before. Judged on the close, so a wick through it does not count.
  3. Price sweeps the low. The bar traded below the neckline and closed back above it.
  4. Price retests the neckline from below. After a break, within the retest window, the bar's high came back to within the tolerance of the neckline and the bar closed below it.

Double Top / Bottom on 1h  ·  double bottom forms  ·  5-bar swings, within 0.3 x ATR

Read it as a sentence: on the 1-hour chart, a second swing low has just been confirmed within 0.3 ATR of an earlier one, with a high enough peak between them. The builder's chart labels the two tops or bottoms, draws the neckline, and marks each bar that broke it.

Double top or equal highs?

Two highs at the same price are also what equal highs and lows describes, and the difference is the level a rule reads. There the level is the highs themselves, and a rule reads price against them. Here it is the trough between them, and the highs only end the pattern. The depth is the other difference: two highs a fraction of a bar apart with a shallow dip between are equal highs, and not a double top.

SixOne8 draws no measured move — the pattern's height projected from the break, which many traders use as a target. That is a charting convention, not a prediction. And a pattern that had already traded above its tops or closed through its neckline by the time it could be known is never read.

Do double tops and bottoms work on your market?

Run an entry check. It will tell you whether, on the market you care about, the bars a neckline broke on moved any differently from a random bar over the history tested. Patterns are rarer than most conditions, so look at how many times it fired before reading anything into the result.

Next

Head and shoulders explained Three swings with the middle one highest, and a neckline that may slope. Equal highs and lows explained Two swings at the same price read as a level in their own right.