The full breakdown
A double top or bottom is just an early tell. There's no trade until the neckline gives way, or price comes back to retest it and holds.
The core setup
It's one of the easiest patterns to spot on the M5-M15 of EUR/USD or USD/JPY. A double top is price getting knocked back twice off the same resistance. A double bottom is price holding the same support twice. Same level, two attempts.
How to enter
Don't sell the second top or buy the second bottom on faith. Wait for the neckline to break, or for price to retest the neckline after the break. RSI divergence at the second push is a bonus, not a requirement.
Trade management
On a double top the stop sits above the highs; on a double bottom, below the lows, roughly 5-8 pips depending on the pair. For the target, measure the height of the pattern and project it off the neckline.
When to skip it
Skip it if the two tops or bottoms are messy, if the neckline is too steep, or if news is dragging the market one way. If you have to squint to see the pattern, it isn't there.
Good setup for training patience. Waiting for confirmation means fewer trades and a lot less getting caught in the noise early.
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Publishing note: This content is not investment advice. Always test on a demo account and take responsibility for your own risk management.