Double Top Bottom

Double Top & Bottom Patterns

Reversal patterns that form when price fails to break a level twice.

Pattern Structure

Double Top (Bearish)

1. Rally to resistance (Peak 1) → pullback to neckline → rally back to same resistance (Peak 2, within 3%) → failure → reversal

Double Bottom (Bullish)

1. Drop to support (Trough 1) → bounce to neckline → drop back to same support (Trough 2, within 3%) → failure → reversal

| Factor | Strong | Weak | |--------|--------|------| | Time between tests | 2-4 weeks | Very close or far apart | | Volume | Declining on 2nd test | Higher on 2nd test | | Peak/trough alignment | Within 3% | Widely different |

Workflow

1. Get Exact Data

get_candles_around_date(symbol=, exchange=, interval=, date=)

2. Mark Peaks/Troughs (2 parallel highlight calls)

draw_chart_analysis(action="create", drawing={
    "type": "highlight",
    "points": [{"time": , "price": }],
    "options": {"text": "Peak 1"}
})

draw_chart_analysis(action="create", drawing={
    "type": "highlight",
    "points": [{"time": , "price": }],
    "options": {"text": "Peak 2"}
})

3. Draw Neckline

draw_chart_analysis(action="create", drawing={
    "type": "support",
    "points": [
        {"time": , "price": },
        {"time": , "price": }
    ],
    "options": {"text": "Neckline"}
})

For double top use "support" (neckline is below). For double bottom use "resistance" (neckline is above).

4. Enter

Standard: Enter on neckline break + close with volume. Stop beyond peaks/troughs. Preferred: Wait for break + neckline retest. Enter on rejection. Aggressive: Enter at second peak/trough with LTF reversal confirmation. Target: Neckline ± (Peak - Neckline). Example: Peak $100, Neckline $90 → Target $80.

Key Rules

• NEVER trade before neckline confirmation — pattern incomplete until it breaks
• NEVER ignore volume: declining volume on 2nd test validates the pattern
• Peaks/troughs must be within 3% to qualify
• Failed double tops/bottoms lead to strong continuation moves

Related Skills

• head-and-shoulders — Similar reversal family
• cup-and-handle — Failed double bottoms can morph into cup patterns

Source & license

This open-source skill is cataloged on AgentStack and links to its original source — we do not rehost the code.

• Author: SKE-Labs
• Source: SKE-Labs/agent-trading-skills
• License: Apache-2.0

Install and usage instructions live in the source repository linked above.