Double Top and Double Bottom Patterns (M and W): Confirmation and Target

The M shape and the W shape

A double top is a shape in which, after an advance, two highs form at a similar height with one trough between them. Because it resembles the letter M, it is called an M pattern, and it also goes by names such as M top or twin peaks. A double bottom is its upside-down version, the W pattern, made of two lows of similar height after a decline and the peak between them; it is also called a W bottom. In this article, as with the head and shoulders, the horizontal line through the trough's low in an M and the peak's high in a W is called the neckline.

• Double top (M): two highs and the trough between them. The trough's low is the neckline
• Double bottom (W): two lows and the peak between them. The peak's high is the neckline
• It is described as a reversal pattern only when there is a prior trend

Confirmation comes with a close beyond the neckline

A double top is complete when, after the second high, price closes below the neckline, that is, the trough's low. In trend terms it is a close below the previous low, meaning the uptrend structure of rising highs and rising lows has broken. A double bottom, conversely, completes when price closes above the high of the peak between the two lows. Until then, the only confirmed fact is that price stalled twice near the same level; which way it resolves has not been decided.

The two highs do not have to match

The two highs (or lows) do not have to be exactly the same height. The second high may be slightly lower, or it may poke just past the first and get pushed back. There is no fixed standard for how close they must be, so the difference people accept varies. The spacing between the two highs matters as well. Two highs only a few candles apart cannot be told apart from a single wobble, so textbooks say there should be enough time between them. As for volume, the typical picture has it lighter on the second high than on the first, and for a double bottom, rising on the neckline breakout. This too describes the typical picture, not a condition.

Calculating the measured target

The measured target works the same way as for the head and shoulders. For a double bottom, you measure the height from the low to the neckline and move it upward by that amount from the point where price broke through the neckline. In the chart below, the first low is 108 and the neckline is 121, so the height is 13 and the measured target is 134. When the two lows differ in height, some use the lower one and others use the average, so the target varies slightly even on the same chart. For a double top, conversely, the height from the high to the neckline is subtracted downward from the break point. Either way it is only a calculation that transfers the pattern's size; it does not mean price will get there.

Triple tops and triple bottoms

When highs form three times at a similar height, it is called a triple top; three lows make a triple bottom. Confirmation works the same way: a triple top completes when price closes below the neckline set by the two troughs between the highs (if the two troughs differ in height, usually the lower one). If the middle high stands clearly above the other two, the shape becomes a head and shoulders, so a triple top can also be seen as a head and shoulders whose head is no higher than its shoulders. Being turned back three times at the same price means that level was a conspicuous resistance, but it sometimes gives way on the fourth attempt, so the count alone cannot decide the outcome.

A second high before confirmation has only touched resistance

When the second high stalls near the first, it is tempting to call it a double top, but all that has been confirmed at that point is that price touched the resistance zone of the earlier high one more time. From there, three paths are all possible: it breaks the neckline and becomes a double top, it turns into a range bouncing between the two prices, or it breaks through the resistance and climbs. The chart below shows the third case. The Support & Resistance Finder groups price levels where swing highs cluster like this into zones, but it does not tell you which way a zone will resolve.

Which timeframe is the W on?

The same W can be a shape that formed over a few hours on a 15-minute chart, or one that took months to years on a weekly chart. The shorter the candles, the more often you notice price stalling twice near the same level, and the harder it gets to distinguish from noise. The measured target also scales with the pattern's size, so a W on short candles gives a small target. And if a larger timeframe is in an ongoing downtrend, a double bottom on a smaller timeframe may be just a brief bounce within the bigger move. How to read moves that look different on each timeframe together is covered in the article on multi-timeframe analysis.

What this article does not say

Figures on how often double tops and double bottoms complete and reach their targets are not included here. The results change a great deal depending on the allowed difference between the two highs, the spacing and the confirmation criteria, and the statistics this course measured directly on past Binance candles do not include chart patterns. These shapes are easy to find on past charts, but while one is forming at the right edge of the chart, you cannot tell which of the three paths above it is on. The Chart Prediction Quiz, where you judge charts with the outcome hidden, is one way to see how different a shape seen in hindsight is from one read in real time.