Let’s make it simple
A child on a climbing frame reaches a similar height twice, with a climb down between. That resembles two price peaks, but a drawing of two peaks is not a complete prediction.
Understand the idea
A possible double top has two high areas separated by a pullback. A possible double bottom has two low areas separated by a bounce. The peaks or lows need not match exactly. Use zones and keep your description tentative.
Some chart readers look for a later break of the level between the two peaks or lows before describing a completed reversal pattern. That rule still cannot guarantee a new trend. A third visit does not automatically make the zone stronger.
A channel uses two roughly parallel boundaries around price movement. It can slope up, slope down or move sideways. Drawing neat lines through messy data can hide uncertainty, so record which reactions you used.
Read exact candle values
| Candle | Open | High | Low | Close |
|---|---|---|---|---|
| A | 15 | 20 | 14 | 19 |
| B | 19 | 20 | 15 | 16 |
| C | 16 | 20.2 | 15.5 | 19.5 |
| D | 19.5 | 20 | 13 | 14 |
A small worked example
High areas near 20 appear twice, with a low near 15 between them. Before a later break below the middle low, this is only a possible double top in our exercise. Even after such a break, price might recover.
Your turn
Draw a possible double top at 20, a middle low at 15 and a later close at 14. Then draw an alternative ending in which price rises above 20.
Compare your exercise with a model response
Draw two peaks near 20 with a low near 15. One ending breaks 15; another exceeds 20. Both are possible scenarios.
Pause & think
Check your understanding
Write an answer, then compare it with the explanation. This is self-study, not an automatically graded test.
Compare all three answers to unlock the review button.
Fictional examples. Education only; no pattern guarantees a result. Course information