Double Top

A double top forms when price rallies to a high, pulls back, rallies again to roughly the SAME high, and then pulls back again. The two peaks form the M shape. The pullback low between them is the "neckline" of the pattern. When price breaks below that neckline, the double top is confirmed and a downtrend usually follows. The pattern works because the second peak is a failed test of the first. Buyers tried to push through resistance and couldn't. That failure trapped late longs and emboldened sellers. The neckline break is the moment those trapped longs start cutting their positions, accelerating the move. Measured target: take the height of the M (peak to neckline) and project that distance below the neckline. A 150-pip pattern implies a 150-pip downside target.