A worked example that explains the rule, not a stock price. The circle marks the first close beyond the level. The blue line is the target. The orange line is the invalidation. Prices are in the right-hand column, and sessions sit under the volume bar.Hollow green candles closed above their open, and filled red candles closed below it.
Numbers in the example chart
From the same calculation that draws the shape and writes the "Measuring the target" section below.
Trigger level
$190 · at the close of session 53
Target
170$
Invalidation
209$
Pattern height
20$
Chart span
64 sessions
What it is
Two peaks at about the same level, split by a trough. The read is simple: price tested a ceiling twice and was rejected twice. Sellers showed up at the same number.
When the trigger starts and when it fails
Signal
A close below the middle low between the two peaks.
First peakPrice reaches a ceiling and is rejected. Normal, and it means nothing on its own.
Middle lowA pullback that sets the decision level: a later break of it is the signal.
Second peakA return to the same price and a second rejection, on lower volume. The seller has shown up at the same number again.
The breakA close below the neckline low. Note: selling at the second top before the break is the costliest beginner mistake.
Recognition rules
The two peaks are within 3% of each other in height · further apart than that and they aren't a double top.
Between them is a low at least 10% of the peak's height.
A meaningful time gap between the peaks (weeks, not days) · peaks too close together make it a swing.
The second peak's volume is lower than the first's.
Confirmation is a close below the middle low.
Measuring the target
The distance from the peak to the middle low is subtracted from the low: a peak at $210 and a low at $190 ⇐ a target of $170.
Where it fools you
Before the middle low breaks, the pattern is not a pattern · it is just two peaks. Most beginners' losses come from selling at the second peak, assuming it will be rejected, then price breaks through and keeps going.
Open the daily timeframe for any symbol and draw the pattern yourself. Your drawing is saved per symbol in your browser, and the terminal does not name or detect the pattern.
━ LevelMiddle low
⇕ MeasureTarget equals pattern height
We do not detect chart patterns with a numeric rule: telling them apart takes judgment on the chart. Candlestick patterns with a numeric rule are detected daily by the candlestick pattern scanner.
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