Double Tops & Bottoms Explained — Measured (PDF Guide)

Two peaks at the same level, and price is supposed to fall. It is the second pattern anybody learns and the easiest to see, which is exactly the problem: you can find one on nearly any chart if you are willing to be generous about "the same level" and silent about how far apart the two peaks have to be. Nobody ever gives you that second number, and it moves the count more than anything else in this guide.

This guide uses the published algorithmic definition - Lo, Mamaysky and Wang, Journal of Finance 2000 - with its thresholds printed as written: two tops within 1.5 per cent of their average, at least 22 bars apart, found on a smoothed curve. Across 35,944 bars that gives 506 double tops and 496 double bottoms. Then it races them against a control and prints what came back. This is a 49-page PDF that teaches Double Tops & Bottoms from the first thing you see on the screen through to a written strategy with an entry, a stop and an explicit rule for when the trade is wrong.

Nothing is taught underneath a chart. Every label sits on the candle, the line or the level it is describing, on real BTC, ETH, SOL and LINK charts, with the smoothed curve the detector actually saw drawn over the candles. There are three quizzes on real charts, each followed by the same chart re-shown annotated with the reasoning, plus faded practice pages where the first steps are filled in and you finish the rest.

WHAT'S INSIDE

The biggest result in the wave pointing backwards - -5.41 points against its own control on 497 cases, z = -2.41. The largest |z| of any negative result here, and still not a finding.

The mirror is negative too - the double bottom scored -1.50. Two mirror shapes both underperforming their own promise is what flat looks like, not what backwards looks like.

The separation rule nobody prints - how many bars apart must the two tops be? At 22 bars the pair count is 1,002. At 10 bars it is 2,538. 9.1 times, same bars, from a threshold almost no source states.

Three thresholds, stacked - a level tolerance, a separation, and a smoothing bandwidth. Two of them are invisible in every write-up you will read.

How often it really happens - one bar in 71 for the top and one bar in 72 for the bottom, the most common pair in this wave with a published definition.

WHAT YOU'LL BE ABLE TO DO

Mark a double top by rule, including the separation nobody mentions.

State all three thresholds you used, and what each one costs.

Read the wave's largest backwards result without over-reading it.

Use the double bottom as a check on the double top.

Explain why a pattern you can find everywhere is usually a threshold problem, not a market observation.

AN HONEST NOTE

Double Tops & Bottoms is a clue, not a crystal ball. It describes what price has already done. This guide contains no win-rates, no backtest results and no promises about what you will make, because nobody can verify those and you should not trust anyone who prints them. What it hands you instead is a set of rules you can test yourself on TradingView in an afternoon. Educational, not financial advice.

Instant download. 49 pages, PDF.