The double top pattern signals a potential trend reversal after two failed highs, helping commodity traders spot weakening buying pressure and possible short-selling opportunities.
The double top technical analysis charting pattern is a common and highly effective price reversal pattern.
This guide explains what the double top pattern is and how to read and interpret it at the hand of an example chart.
How to Read a Double Top Pattern
Take a look at the following chart of Altria (MO) stock that illustrates the double top reversal pattern before we continue to interpret it.
Components of a Double Top
- First High – Bulls push prices upwards making new highs. However, these new highs are short-lived and prices retreat.
- Second High – Prices don’t retreat for long because bulls make another run, making a similar high. Nevertheless, this is bearish, because bulls were unable to push prices higher. Bears held their ground at the previous high level. The bears push prices back to support (confirmation line). This is a pivotal moment – either bulls will make another push higher or bears will take control and push prices even lower, more than likely taking over for good.
Recognizing a Potential Sell Signal
A potential sell signal is given when the price closes below the confirmation line.
Note that traders expect a significant increase in volume to accompany the confirmation line break. If there is very little volume when the price pierces the confirmation line, then the move downward is suspect.
Small volume usually means weak support of price movement.
Another similar chart pattern is the head and shoulders pattern. The opposite of the double top is the bullish double bottom.
Where to Trade Commodities Using Technical Analysis
Further Reading on Reversal Patterns
These reversal tools complement Double Top: Bearish Engulfing Pattern, Evening Star, and Inverted Hammer.
FAQs
Here are some answers to frequently asked questions in relation to the double top reversal pattern.
Is a double top bullish or bearish?
The double top has two high points, resembling an M-shape, which indicates a bearish reversal signal. This pattern emerges at the end of a bullish trend. The measured decline between the two high points is indicative of resistance to the price highs.
In contrast, a double bottom resembles a W-shape, signifying a bullish reversal in trend.
What does double top mean in forex?
The double top is one of the most popular technical analysis patterns used by forex traders. However, it’s applicable to all types of markets to indicate an uptrend. It emerges in the form of two consecutive peaks at the end of a bullish trend, roughly recognizable as an M-shape.
Technical analysis is most widely used in CFD and forex trading. If you’re ready to apply these techniques, browse our vetted CFD brokers or forex brokers.
Update history
This page was revised 4 times between August 2020 and April 2026.
Added introductory explanation of technical analysis usage in CFD and forex trading, plus embedded broker comparison widget.
Removed broker review section and commodity trading guides, refocused Further Reading section on reversal pattern resources.
Added table of contents, restructured sections with new headings for clarity, expanded FAQ with two new questions about double top patterns, added volume analysis detail, and reorganized broker and further reading content.
Reorganized content structure by moving broker trading section and related links to new "How to Get Started Trading" heading while refining the sell signal explanation.
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