Double Top
A Double Top is a bearish reversal where price makes two peaks at approximately the same level with a valley between them, and confirms with a close below the neckline (the low of that valley).
What it measures
Two swing highs within a small percentage of each other, separated by a swing low ("neckline"). The pattern is complete only when price closes below the neckline; the projected target is the height of the peaks above the neckline, projected downward from the break point.
Parameters
| Name | Default | Range | Note |
|---|---|---|---|
| peak_tolerance_pct | 2 | 0.5–5 | How close the two peaks must be, in percent. Tighter = cleaner pattern. |
| min_valley_depth_pct | 3 | 1–10 | Minimum drop from peaks to neckline. Filters out shallow "double tops" that are noise. |
How it behaves
Between the two peaks, momentum weakens visibly — the second peak often prints with lower volume or with a divergence on an oscillator. The neckline break is the trigger; a retest of the broken neckline from below is the higher-quality entry.
When it misleads
Many "double tops" resolve as consolidation-and-continuation rather than reversals — price makes the two peaks, retreats, and then breaks upward. Filters that help: require momentum divergence on the second peak, require volume expansion on the neckline break, and treat neckline breaks that immediately close back inside the pattern as failed setups.
Backtest result
Sourced backtest in preparation — we're running the rule on our own historical candles before publishing numbers we can stand behind.
FAQ
- How exact do the two peaks have to be?
- Not exactly equal — 1–3% tolerance is standard. Perfect equality is rare in real markets; the important thing is that buyers rejected the same zone twice.
- When is the entry — on the break or the retest?
- The neckline break is the classical trigger. Retests offer better risk-reward but do not always happen — many strong breaks run without looking back.
- Double Top vs Triple Top?
- Triple Top has three peaks at the same level. It is rarer, generally seen as more reliable, but takes longer to complete — and often morphs into an ascending or symmetrical pattern before resolving.
Build a strategy with Double Top
Drop the block into the Nodlow builder and backtest on real historical data.
Try it in the builder