← Back to Pattern Index
Double Top (M Pattern)
Signal
Bearish
Win Rate
72%
Avg Move
-14.0%
Reliability
High

Pattern Definition

A double top has two similar highs forming an M shape. A clear pullback between the two highs creates the neckline; a breakdown below the neckline confirms the pattern.

Market Psychology

Heavy selling resistance was encountered at the same price level twice. After the second attempt fails, bears gain confidence; breaking the neckline triggers a large wave of selling.

Trading Application

Enter short on a high-volume breakdown below the neckline (win rate 72%). Stop-loss above the second high. Target = M height (neckline to high) measured down from breakdown point.

Important Notes

The two highs don't need to be identical — within 3% is acceptable. A second high slightly lower than the first strengthens the signal.