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Double Top and Double Bottom Explained

A double top is two highs at about the same price after a rise, with a close under the dip between them; a double bottom is the same shape upside down after a fall. This paper shows you a real double top drawn from July 2025, the two shapes as an M and a W, the double top and a double bottom on the daily chart with their necklines, and the ZigZag indicator that draws the swings on your platform.

Difficulty
Intermediate
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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Two tops

A double top is two highs at about the same price after a rise, and a close under the dip between them. The euro against the dollar rose to 1.18295 on 1 July 2025, dipped to 1.15565 on 17 July, and rose again to 1.17888 on 24 July — 41 pips short of the first top, a pip being the fourth decimal place, the smallest step most people count in. On 29 July the day closed at 1.15457, under the dip. Two highs, one dip, and a close through the dip: that is the whole shape.

An M and a W

The two shapes are easiest to remember as letters. A double top is an M: two peaks at about the same height with a dip between them, after a rise. A double bottom is a W: two troughs at about the same depth with a bump between them, after a fall. The line through the middle of the letter — under the M's dip, over the W's bump — is the neckline. A close through the neckline is what completes the shape; until then it is two highs, or two lows.

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