Definition
Double Top forms when price makes two highs at similar levels with a moderate decline between them. It signals that buyers couldn't push price higher on the second attempt. A break below the middle trough confirms the bearish reversal.
Formula
Price Target = Support - (Resistance - Support)
Example
Price peaks at $50 twice with a pullback to $45 between. A break below $45 targets $40 ($45 - $5). The pattern typically spans several weeks.
FAQ
What is Double Top?
A bearish reversal pattern with two peaks at approximately the same level.
How do you calculate Double Top?
A common formula for Double Top is: Price Target = Support - (Resistance - Support)
Why is Double Top important?
Double Top helps investors evaluate chart patterns and make more informed decisions.