Double Top Pattern: Spot It on Live Gold

What it shows

A coloured line through the four swing points (the rise into the first top, both tops and the dip), a dotted neckline at the dip’s price that runs to the breakout candle, a light fill between, the pattern name above the tops, and a dotted target line ending in a Target label.

How Pravex works it out

1. The scan looks back 600 candles at most. It first marks turning points: a candle whose high is strictly higher than the previous 5 highs and at least as high as the next 5 is a swing high, and lows work the other way round. Because 5 later candles are needed, every turning point is 5 candles old before it can be used. Two turning points of the same kind in a row are merged into the more extreme of them.
2. Take four alternating swings in a row: a low, a high, a low and a high. The two highs are the tops, the middle low is the neckline level, and the first low starts the lead-in leg.
3. Height is the higher top minus the middle low. The tops may differ by no more than the Second peak match share of the height. The leg from the first low to the first top must cover at least the Lead-in strength share of the height, and the middle low must sit above the first low. Between the tops, no high may rise above the higher top by more than the Overshoot allowance share of the height.
4. Breakout: the first candle after the second top that closes under the neckline (a flat line at the middle low). Target: the neckline minus the height. Failure level: the higher top plus the Overshoot allowance; a high above it before a close under the neckline drops the shape.
5. From the breakout on, each later candle is checked: touching the target first makes the status Reached, crossing the failure level first makes it Failed, a candle that does both at once makes it Indefinable, and until then it stays Awaiting.

Settings

Setting	Default	What changing it does
Which patterns to keep	All	Decides which patterns are drawn. With All nothing is hidden. Awaiting and Reached removes Failed and Indefinable patterns, Only Awaiting also removes Reached ones, and Last Awaiting narrows it to the newest pattern that is still Awaiting.
Where targets are drawn	Only Awaiting	Controls the target lines only. Pick All, Only Awaiting, Awaiting and Reached, or None; the pattern lines and fill stay whatever you pick here.
Lead-in strength	50	How strong the move into the pattern must be, as a percent of the pattern’s height. At 50 the leg that leads into it must cover at least half that height. Raise it to demand a clearer prior trend, lower it to accept shallow lead-ins.
Second peak match	10	How much lower or higher the second top may be than the first, as a percent of the pattern’s height. At 10, tops within a tenth of the height of each other count as level. Raise it to accept a lopsided double top.
Overshoot allowance	15	How far a high between the tops may poke above the higher top, as a percent of the height. It also sets the failure level above the tops once the pattern is live.
Show unconfirmed patterns	off	When off, only broken-out patterns are drawn. When on, Pravex also draws shapes still waiting for their breakout, the last leg dotted and a provisional target in place. That final point is not a confirmed swing but the running high or low, so it shifts as new candles print.

How traders read it

A double top reads as buyers failing twice at the same level; the close under the dip is the confirmation. The target is the pattern’s height projected down from the neckline.

Try it on invented prices: the tops sit at 110 and the middle low at 100. The height is 10, so when a candle closes under 100 the target is 90. A stop just over the tops at about 111 puts 11 of risk against 10 of room to the target, a ratio under one to one.

When it misleads

A double top fails most often in a strong trend, when the dip between the tops is just a pause and the next candle closes above both. The pattern is also only drawn after the neckline breaks, so by then part of the move is done. Gold’s hourly swings are frequent, so with a high Second peak match many shallow pairs qualify. Confirmed swings are the only input, but the drawing is not frozen: a more extreme swing of the same kind arriving later replaces the old one, which can reshape or remove the pattern, and a close outside on the forming candle can still slip back before it finishes.

Questions and answers

How level do the two tops have to be?

Within the Second peak match share of the pattern’s height, 10 by default. With a pattern height of 10, the tops may be up to 1 apart.

When does Pravex draw a double top?

After a candle closes under the neckline, the flat line at the dip between the tops. With unconfirmed patterns shown it also shows double tops that have not broken yet.

What is the difference between a double top and a triple top?

A double top has two peaks with one dip between them. A triple top has three peaks with two dips, and the peaks and the dips are each held to their own tolerance.

What makes a double top Failed?

A high above the higher top plus the Overshoot allowance share of the height, after the break. If that happens before any close under the neckline, the shape is dropped.

Related: Double Bottom Chart Pattern, Triple Top Chart Pattern, Head and Shoulders Chart Pattern, All Chart Patterns, every indicator.