Constructing double tops from failed resistance retests

Four checkpoints for a double top

A double top is a two-peak reversal construction. It stays incomplete until price breaks the low between the peaks after a failed return to the first high.

TradersWeek editorial reading organizes that workflow into four checkpoints so the construction can be built in order and left unfinished when a later checkpoint fails.

Locate the first supply wall

In an established advance, the first peak forms when remaining demand is absorbed and selling pressure takes control, marking that high as major resistance. Trading activity at that first resistance test often expands sharply as the market fails to extend the prior uptrend.

That prior peak is the major resistance level once demand is absorbed and supply dominates. It is tested again on the second advance.

Treat the pullback as unfinished business

The decline from the first peak is a corrective phase between the two highs and does not, by itself, complete the pattern. This pullback can occur while the broader bullish case is still intact.

The trough of the corrective phase is the intervening low, the later completion condition.

Require a weaker-volume retest

A second rally back to the same resistance level is the construction's retest, where remaining sellers meet late buyers. The second resistance test typically shows noticeably lighter volume than the first because fewer buyers remain.

Volume-price analysis compares activity at the first peak with activity at the second. A sharp expansion on the first test and lighter activity on the retest describe seller control.

Withhold completion until the intervening low breaks

The double-top construction is treated as complete only after price declines through the low established between the two peaks. A break below the intervening low is the completion condition.

TradersWeek editorial reading therefore withholds a completed double top until that break occurs.