Double Top

What it is

A double top forms when price rallies to a high, pulls back, and rallies again to roughly the same level without exceeding it. The swing low between the two peaks is called the neckline.

The pattern is read as bearish only once a candle closes below the neckline. Until then it is just two highs at a similar level, which is very common in ranges.

How ClosedCandle detects it

• Two swing pivots (from the 1.5× ATR zigzag) at nearly the same price: the second may differ from the first by at most 0.5× ATR.
• The two pivots are 8–120 candles apart, the swing between them is at least 1× ATR deep, and price must have entered the pattern from the far side of that swing.
• The neckline is the horizontal level of that middle swing. The pattern is recorded as soon as the second pivot is confirmed by a closed candle.
• Confirmed when a candle closes beyond the neckline; invalidated when a candle closes beyond the more extreme of the two pivots (also the measured stop), or after 30 candles without a breakout.
• Only closed candles are used; a wick through a line never counts. Once recorded, the detection is never changed.

Full methodology · how setups are measured.