Double Top

The double top pattern is often seen in lower and higher time frame candlestick charts.

The asset is forming a double top while trading in a channel between the resistance and support levels. After an unsuccessful attempt to break through the resistance line for the second time, the quotes turn back and overcome the neckline - the top support level. After a successful breakthrough down and retesting of the newly formed resistance, the price moves further, completing the formation of the pattern.

You can see a great example of this pattern in the 30-minute USCRUDE chart below.

The picture shows the formation of two peaks and an impulse breakout of their support level. Further, there is a consolidation of the instrument below and re-testing of the new resistance. The entry point is below the support level. Next, a conservative target is calculated according to money management rules.

The target size is equal to the height from the top support level to the resistance. Stop loss in this case should be set above the support level to help traders avoid losing money rapidly.

The double top pattern can be seen in various time frames and is a valuable tool in a trader's toolbox for identifying potential market reversals.