{"format":"alysly-page/1","url":"https://alysly.com/learn/reversal-chart-patterns/","json":"https://alysly.com/json/learn/reversal-chart-patterns/index.json","lang":"en-US","title":"Head and Shoulders, Double Top & Double Bottom Explained","description":"Head and shoulders, double top, double bottom and rounding bottom: construction, neckline, confirmation and the textbook targets – along with their limits.","published":"2026-08-02T15:41:33+02:00","modified":"2026-11-01T18:26:04+01:00","alternates":[{"lang":"de-DE","url":"https://alysly.com/de/lernen/chartmuster-umkehr/","json":"https://alysly.com/json/de/lernen/chartmuster-umkehr/index.json"}],"about":"Machine-readable version of the page at url. It contains the text, tables and key figures published there, but not the interactive charts and tools.","breadcrumb":[{"name":"Investing & Trading Basics","url":"https://alysly.com/learn/"},{"name":"Level 2","url":"https://alysly.com/learn/#level-2"},{"name":"Reversal Chart Patterns","url":"https://alysly.com/learn/reversal-chart-patterns/"}],"content":[{"type":"paragraph","text":"Level 2 Patterns & Indicators · Part 3/9"},{"type":"heading","level":1,"text":"Reversal Chart Patterns"},{"type":"paragraph","text":"By Alexander Bock, founder and data analyst","links":[{"text":"Alexander Bock","href":"https://alysly.com/about/"}]},{"type":"paragraph","text":"Reversal formations run for weeks or months. Unlike candlestick patterns, they do not describe a balance of forces but a process: a trend slowly loses the ability to produce new extremes."},{"type":"heading","level":2,"id":"head-and-shoulders","text":"Head and Shoulders"},{"type":"image","src":"https://alysly.com/img/ta/head-shoulders.8b3180be00ee84be9ddda8af213960ee0d0d93ae39f5451ac1b83befb35ec2ac.webp","alt":"Head-and-shoulders formation with neckline and downside break"},{"type":"paragraph","text":"(1) left shoulder, (2) head — the highest high, (3) right shoulder that no longer reaches the head. The dashed neckline connects the intervening lows. (4) Only its break completes the pattern; before that it is just price action with three peaks. The textbook target is the head-to-neckline height projected downward — a rule of thumb, not a forecast."},{"type":"paragraph","text":"Three highs, with the middle one the highest. The line that connects the two lows in between is the neckline."},{"type":"paragraph","text":"The decisive point is often overlooked: the formation is only complete once the neckline breaks. Before that you have price action with three peaks, and that appears constantly in every chart. Trading before the break means trading a guess about an unfinished shape."},{"type":"paragraph","text":"The textbook target is the distance from the head to the neckline, projected down from the break. That rule is a convention from the charting tradition, not a measured value. It gives you an order of magnitude, not a forecast."},{"type":"image","src":"https://alysly.com/img/ta/inverse-head-shoulders.7e110124736432ab63ef0d1ba8126e87a960f52d5dd50f30396b3cf8b2c3e23e.webp","alt":"Inverse head-and-shoulders formation with an upside break"},{"type":"paragraph","text":"The same formation upside down: (1) left shoulder, (2) head as the lowest low, (3) right shoulder above the head, (4) upside break of the neckline. Bottom reversals typically take longer than tops — panic is fast, confidence rebuilds slowly."},{"type":"paragraph","text":"At a bottom, the same formation appears upside down. Bottom formations usually need more time than tops: panic is fast, confidence comes back slowly. That asymmetry is one of the more robust observations in charting."},{"type":"heading","level":2,"id":"double-top-and-double-bottom","text":"Double Top and Double Bottom"},{"type":"image","src":"https://alysly.com/img/ta/double-top.bb631ad3f0b41a5cf31a4d58b777a0380cab687bc9e8c7beb1156c3051c8d188.webp","alt":"Double top: two highs at a similar level followed by a neckline break"},{"type":"paragraph","text":"(1) and (2) are two highs at nearly the same price — the second attempt fails where the first one did. (3) What matters is not the second peak but the break of the intervening low: only then is the sequence of higher lows broken. Two highs without that break are a pause, not a pattern."},{"type":"paragraph","text":"Two highs at roughly the same level. What confirms the formation is not the second high but the break of the low in between. Only then is the sequence of higher lows broken."},{"type":"image","src":"https://alysly.com/img/ta/double-bottom.93cd4685584b229399ffb89a5166cc8723e2ab2e4e1821470dcf1753f1792763.webp","alt":"Double bottom: two lows at a similar level followed by an upside breakout"},{"type":"paragraph","text":"(1) and (2) mark the same price level twice, and it is not breached again. (3) The bottom is only confirmed once the intervening high is exceeded. The time between the two lows says more than their exact equality: the wider the gap, the more robust the zone."},{"type":"paragraph","text":"At a bottom it works the same way. More important than the exact equality of the two extremes is the time between them. Two lows a week apart are a detail. Two lows two months apart mark a zone that held twice, independently."},{"type":"paragraph","text":"Triple formations follow the same logic. They are statistically rarer. The reason is not that the market avoids them. A zone that has held twice often breaks on the third attempt."},{"type":"heading","level":2,"id":"rounding-bottom","text":"Rounding Bottom"},{"type":"image","src":"https://alysly.com/img/ta/rounding-bottom.a2060bd626ed50fc308df7968f6c97fb42dcf4d13ac9ecd61db0495083869eac.webp","alt":"Rounding bottom: a slow turn from falling to rising prices"},{"type":"paragraph","text":"(1) No single turning point but a gradual rotation: downward pressure fades, price flattens out, recovery starts slowly. (2) Only the break above the rim makes it tradable. Rounding bottoms typically develop over weeks or months — on minute charts you rarely see one without reading it in."},{"type":"paragraph","text":"Not a turning point but a slow rotation: downward pressure fades, the price flattens out, and the recovery sets in step by step. The shape only becomes tradable with the break above the rim."},{"type":"paragraph","text":"Rounding bottoms need time, typically months. On short timeframes, you only find them by reading them into the chart. The shape is smooth enough that almost any price series fits it somewhere."},{"type":"heading","level":2,"id":"what-reversal-formations-give-you","text":"What Reversal Formations Give You"},{"type":"paragraph","text":"Three things you can use: a level (the neckline or the extreme in between), a point of refutation (a move back into the formation) and an order of magnitude (the height of the formation)."},{"type":"paragraph","text":"What they do not give you is a probability. The hit rates published in pattern books come almost entirely from visually selected examples without a clean base rate. How you actually establish such a number is covered at the end of this level in testing a pattern.","links":[{"text":"testing a pattern","href":"https://alysly.com/learn/testing-a-pattern/"}]},{"type":"heading","level":2,"id":"next","text":"Next"},{"type":"paragraph","text":"The other side: formations that describe a pause in the trend rather than its end."},{"type":"list","ordered":false,"items":[{"text":"Previous Continuation Patterns and the Doji Family","href":"https://alysly.com/learn/candlestick-continuation-patterns/"},{"text":"Next Continuation Chart Patterns","href":"https://alysly.com/learn/continuation-chart-patterns/"}]},{"type":"heading","level":2,"text":"Indices"},{"type":"table","caption":"Indices, performance over the selected period","columns":["Index","1M"],"rows":[[{"text":"Dow Jones","href":"https://alysly.com/markets/indices/dow-jones/"},{"text":"+1.0%","data":{"m1":"+1.0%","m3":"-4.3%","m6":"+4.9%","ytd":"+7.6%","max":"+30.0%"}}],[{"text":"S&P 500","href":"https://alysly.com/markets/indices/sp500/"},{"text":"-2.6%","data":{"m1":"-2.6%","m3":"-2.2%","m6":"+4.2%","ytd":"+10.6%","max":"+35.6%"}}],[{"text":"MSCI World","href":"https://alysly.com/markets/indices/msci-world/"},{"text":"-2.0%","data":{"m1":"-2.0%","m3":"-2.4%","m6":"+3.7%","ytd":"+10.0%","max":"+35.0%"}}],[{"text":"MSCI ACWI","href":"https://alysly.com/markets/indices/msci-acwi/"},{"text":"-3.3%","data":{"m1":"-3.3%","m3":"-3.0%","m6":"+2.3%","ytd":"+10.2%","max":"+41.5%"}}]]},{"type":"heading","level":2,"text":"ETFs"},{"type":"table","caption":"ETFs, performance over the selected period","columns":["Fund","1M"],"rows":[[{"text":"SPDR S&P 500 ETF Trust SPY","links":[{"text":"SPDR S&P 500 ETF Trust","href":"https://alysly.com/markets/etfs/us/spy/"}]},{"text":"-2.6%","data":{"m1":"-2.6%","m3":"-2.2%","m6":"+4.2%","ytd":"+10.6%","max":"+35.6%"}}],[{"text":"Vanguard S&P 500 ETF VOO","links":[{"text":"Vanguard S&P 500 ETF","href":"https://alysly.com/markets/etfs/us/voo/"}]},{"text":"-2.6%","data":{"m1":"-2.6%","m3":"-2.2%","m6":"+4.2%","ytd":"+10.6%","max":"+34.1%"}}],[{"text":"iShares Core MSCI World UCITS ETF USD (Acc) EUNL","links":[{"text":"iShares Core MSCI World UCITS ETF USD (Acc)","href":"https://alysly.com/markets/etfs/ishares-core-msci-world-ucits-etf-usd-acc/"}]},{"text":"-2.0%","data":{"m1":"-2.0%","m3":"-2.3%","m6":"+4.3%","ytd":"+10.6%","max":"+487.5%"}}],[{"text":"Xtrackers MSCI Emerging Markets UCITS ETF 1c XMME","links":[{"text":"Xtrackers MSCI Emerging Markets UCITS ETF 1c","href":"https://alysly.com/markets/etfs/xtrackers-msci-emerging-markets-ucits-etf-1c/"}]},{"text":"-9.4%","data":{"m1":"-9.4%","m3":"-4.1%","m6":"-3.3%","ytd":"+14.0%","max":"+93.0%"}}]]},{"type":"heading","level":2,"text":"Stocks"},{"type":"table","caption":"Stocks, performance over the selected period","columns":["Stock","1M"],"rows":[[{"text":"NVIDIA Corporation NVDA","links":[{"text":"NVIDIA Corporation","href":"https://alysly.com/markets/stocks/nvidia-corporation/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"-13.5%","data":{"m1":"-13.5%","m3":"-2.5%","m6":"+5.2%","ytd":"+10.8%","max":"+62.2%"}}],[{"text":"Apple Inc. AAPL","links":[{"text":"Apple Inc.","href":"https://alysly.com/markets/stocks/apple-inc/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"-0.3%","data":{"m1":"-0.3%","m3":"+7.3%","m6":"+16.8%","ytd":"+22.1%","max":"+45.8%"}}],[{"text":"Tesla Inc. TSLA","links":[{"text":"Tesla Inc.","href":"https://alysly.com/markets/stocks/tesla-inc/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"+5.2%","data":{"m1":"+5.2%","m3":"+21.7%","m6":"+2.3%","ytd":"-11.4%","max":"+65.3%"}}]]},{"type":"paragraph","text":"Data note 1","href":"#dn-1"},{"type":"heading","level":2,"text":"More Studies"},{"type":"list","ordered":false,"items":[{"text":"Jul 21, 2026 Collectibles ×5.4 for the same cards, matched-model index, Mar 2022 – Aug 2026 Is the Pokémon Card Market in a Bubble? 4,159 Sales Analyzed Prices for PSA-graded cards multiplied. Measured on the same cards they rose 438%, while the raw median shows 786% because pricier cards came up for sale later.","href":"https://alysly.com/analysis/pokemon-card-market-bubble/"},{"text":"May 19, 2026 Crypto 45.6% Bitcoin’s annualized volatility, Jul 2024 – Sep 2026 Bitcoin in Investment Portfolios: The Real Numbers Bitcoin is calmer than it was and still about three times as volatile as the stock market. It moves with stocks, not with gold.","href":"https://alysly.com/analysis/bitcoin-investment-portfolios/"},{"text":"Mar 17, 2026 Wealth €1.2m needed for €3,000 a month indefinitely at a 3% real return Living Off Your Returns: What It Really Takes The capital you need is arithmetic. The return you assume is a guess, and it can triple the answer.","href":"https://alysly.com/analysis/living-off-returns/"}]},{"type":"paragraph","text":"View all studies","href":"https://alysly.com/analysis/#studies"},{"type":"heading","level":2,"text":"Learn"},{"type":"list","ordered":false,"items":[{"text":"Continuation Chart Patterns Triangles, flags, pennants, wedges, rectangles – pauses in a trend.","href":"https://alysly.com/learn/continuation-chart-patterns/"},{"text":"Moving Averages SMA, EMA, crossovers – smoothing and its price: lag.","href":"https://alysly.com/learn/moving-averages/"}]},{"type":"paragraph","text":"Course overview","href":"https://alysly.com/learn/"},{"type":"paragraph","text":"Updated Nov 1, 2026 · Content and figures checked Oct 19, 2026"},{"type":"heading","level":2,"id":"note-legend-h","text":"Data Notes"},{"type":"paragraph","text":"All calculations run automatically and are not investment advice."},{"type":"list","ordered":true,"items":[{"id":"dn-1","text":"Returns computed automatically from the price series, excluding dividends, taxes and costs."}]},{"type":"paragraph","text":"Data and methodology: Alysly · Responsible for content: Alexander Bock","links":[{"text":"Alysly","href":"https://alysly.com/methodology/"},{"text":"Alexander Bock","href":"https://alysly.com/about/"}]},{"type":"paragraph","text":"View all data notes","href":"https://alysly.com/notes/"}],"structured_data":[{"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://alysly.com/#org","name":"Alysly","url":"https://alysly.com/","logo":{"@type":"ImageObject","url":"https://alysly.com/img/icon-512.png","width":512,"height":512},"description":"Data-driven insights, transparent analysis and powerful tools for long-term investors.","email":"mail@alysly.com","contactPoint":{"@type":"ContactPoint","contactType":"customer 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Not investment advice. All data without guarantee. Financial information is analyzed and presented partly with AI assistance."}