65-Day Academy · Day 12 · Reading Charts
Double Top / Double Bottom
The two tests
Double top: price peaks, pulls back, returns to the same zone and FAILS again — two rejections of the same supply. The pattern is only CONFIRMED when price closes below the valley between the peaks (the confirmation line). Before that, it is just "a stock that went up twice."
Confirmation discipline
The valley break is everything: without it, double tops "confirm" constantly and mean nothing (most second tests in uptrends break out upward, not down). Measured target: peak-to-valley height projected from the break. Double bottoms mirror all of this at support.
What you'll practise
True or false: two peaks at the same price level are enough to declare a double top and sell.
10 XP in the app · introductory
Sources
- Double Top PatternInvestopedia
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All lessons are for educational purposes only and are not individualized financial advice, a recommendation, or a solicitation to buy or sell any security. Options involve substantial risk and are not suitable for every investor.