Double tops & bottoms — the M and the W

Two failed attempts = exhaustion

A double top (an “M”) forms when an uptrend pushes to a high, pulls back, rallies to the same high again, and fails. Two rejections at one price say the buyers are exhausted. The low between the two peaks defines the neckline. A double bottom (a “W”) is the exact mirror at the end of a downtrend: two failed attempts to break a low, then a turn up.

The trade

Once the neckline breaks, the playbook is the same as every pattern in this module: enter on the retest of the broken neckline (now flipped), stop just on the other side of it, and target the height of the pattern (peak to neckline) projected from the break. Defined risk, measured reward.

• Double top (M) = two highs rejected at the same level → reversal down. Double bottom (W) = mirror, reversal up.
• The low/high between the two attempts is the neckline.
• NOT valid until the neckline breaks on a close — never trade the second peak alone.
• Enter on the retest, stop beyond the neckline, target = pattern height projected from the break.