Double Top And Bottom

AAA

DEFINITION of 'Double Top And Bottom'

Chart patterns in which the quote for the underlying investment moves in a similar pattern to the letter "W" (double bottom) or "M" (double top). Double top and bottom analysis is used in technical analysis to explain movements in a security or other investment, and can be used as part of a trading strategy to exploit recurring patterns.

INVESTOPEDIA EXPLAINS 'Double Top And Bottom'

Double top and bottom patterns typically evolve over a longer period of time than a day, and do not always present an ideal visual of a pattern because the shifts in prices don't necessarily resemble a clear "M" or "W". When reviewing the chart pattern, it is important for investors to note that the peaks and troughs do not have to reach the same points in order for the "M" or "W" pattern to appear.

RELATED TERMS
  1. Hikkake Pattern

    A charting pattern used by technical traders which is used in ...
  2. Memory-Of-Price Strategy

    A trading strategy that assumes the support and resistance points ...
  3. Head And Shoulders Pattern

    A technical analysis term used to describe a chart formation ...
  4. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  5. Resistance (Resistance Level)

    A chart point or range that caps an increase in the level of ...
  6. Bottom

    The lowest point or price reached by a financial security, commodity, ...
Related Articles
  1. Support And Resistance Basics
    Active Trading Fundamentals

    Support And Resistance Basics

  2. Continuation Patterns: In-Depth Look ...
    Charts & Patterns

    Continuation Patterns: In-Depth Look ...

  3. Continuation Patterns: Rectangles and ...
    Charts & Patterns

    Continuation Patterns: Rectangles and ...

  4. Continuation Patterns: An Introduction
    Charts & Patterns

    Continuation Patterns: An Introduction

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center