Do Double Tops and Bottoms Reverse? 2 Years of USD/JPY Tested

Ten bars after a double top or bottom broke its neckline, only H1 had moved in the reversal direction more than half the time in both 2024 and 2025. The rates were 49.71% and 50.15% on M15, and 46.88% and 31.43% on H4. Traded, even H1 was unstable: net pips went from +613.3 in 2024 to −562.7 in 2025.

Open chart with these settings

A double top has two highs near the same price with a low between them. A double bottom turns the geometry upside down: two lows with an intermediate high. The usual reading expects price to continue in the reversal direction after it crosses the neckline.

Hindsight makes the two highs or lows look unambiguous, but at the time of the first high or low the bars to its right do not exist. This test waits for those bars to close (mainly five on each side of a pivot), then starts measuring when the close moves below the intermediate low for a double top or above the intermediate high for a double bottom.

202420255-bar pivots · close beyond neckline · 10 bars later

Do these patterns really reverse?

Only H1 cleared a 50% reversal rate in both years. The table covers USD/JPY in 2024 and 2025, uses five-bar pivots (five bars compared on each side before a high or low is confirmed), waits for a neckline close, and then holds each pattern for 10 bars. It counts each formation before removing overlapping trades.

H1 stayed over 50%, but its double tops and double bottoms did not contribute equally. In 2024, 55 hourly double tops had a 43.64% reversal rate and a mean of −11.86 pips. The 69 double bottoms reached 66.67% and +12.73 pips. Combining them into 56.45% hides that split.

H4 did not support a reversal claim. In 2025, 20 double tops reversed 35.00% of the time and 15 double bottoms reversed 26.67%. Both means pointed away from the expected direction.

What double tops and double bottoms measure

These are three-point price patterns, not oscillators with a formula.

The mechanical double-top definition used here has four steps:

1. Find a swing high with the same number of lower highs on its left and right
2. Require two swing highs near the same price and a swing low between them
3. Use the intermediate low as the neckline
4. Mark the pattern formed when a close falls below that neckline

The double-bottom definition reverses the highs and lows. Its intermediate high becomes the neckline, and the pattern is formed on a close above it.

The two highs or lows may differ by 1.2 ATR(14), clamped between 0.1% and 1.0% of price. Pattern height must be at least 0.3 ATR, and the two pivots may be no more than 300 bars apart. Those rules match the current chart overlay.

A confirmed shape and a neckline break happen at different times

A five-bar swing is not knowable until five later bars have closed. With Swing Period at 30, the delay is 30 bars. That means 7.5 hours on M15, 30 hours on H1 and 120 hours on H4.

The research separates entry when the second pivot becomes knowable from entry after the neckline close. No trade is moved back to the high or low where a pivot is later found.

Double top and bottom settings and signals

Formiq draws the patterns over the candles in the main price pane.

TradingView's own double-top definition also calls the pattern formed when a close falls below the intermediate low. Merely seeing a possible second high is an earlier state.

The one input is Swing Period

A lower value finds smaller price turns and draws more patterns. A higher value keeps larger formations, but it also increases the confirmation delay.

Double tops are red and double bottoms are green. The overlay draws the two highs or lows, a dashed neckline and a green dotted target. The target is one pattern height beyond the neckline in the expected reversal direction.

The common trading rule

The strategy sells double tops and buys double bottoms. An opposite pattern closes the trade, and the strategy does not open a new position on the same bar that closes the old one.

How this was measured

For the 10-bar measurement, a fall after a double top and a rise after a double bottom count as positive. The test covers full-year 2024 and 2025 windows and also splits 2025 into halves.

How often does the target get hit?

M15 and H1 held at 64% to 66% in both years; H4 did not carry across. The standard target is one pattern height beyond the neckline. I followed that target and the failure level for up to 300 bars, using five-bar pivots.

The reward and risk are not the same size, however. The target is one pattern height from the neckline; the failure level is roughly 1.2 pattern heights from entry. Reading the target percentage as an ordinary win rate would ignore that difference.

What Swing Period should you use?

A longer one removes the H4 observations first. The default of 30 is compared with the minimum of 5. All rows enter after the neckline and exit on an opposite pattern.

Swing Period 30 found no completed H4 trade in 2024 and only three in 2025. The +225.3 pips and 33.33% win rate from three trades cannot carry the same weight as the 225 M15 trades.

Across all eight Swing Period values, the number profitable in both years was 2/8 on M15, 0/8 on H1 and 2/8 on H4 after a neckline close. The two H4 survivors still had very few trades, so their count is not evidence that H4 was the better chart.

Is waiting for the neckline safer?

It changed the sign on M15 and nowhere else. Swing Period stays at 5; only entry timing changes.

The neckline cut trade count roughly in half, but lower frequency did not make every timeframe profitable.

Does last year's best still hold?

Three of six stayed profitable. The best 2024 Swing Period was moved unchanged to 2025, and the best 2025 value was moved to 2024. Entry remains after the neckline.

Splitting 2025 in half left only five of 24 timeframe-and-setting cells profitable in both halves: 2/8 on M15, 1/8 on H1 and 2/8 on H4.

Why a 60% win rate lost money

The average win never reached the average loss. These are the default Swing Period 30 results after waiting for the neckline.

The five H1 trades in 2025 won 60% of the time and lost 235.6 pips. Three wins averaged +274.30 pips; two losses averaged −529.25. Five trades are also too few to treat 60% as a setting-selection statistic.

Do ADX and session filters help?

Neither improved both years the same way. Filters were applied to the five-bar neckline entry, which had enough trades to compare.

Adding ADX(14) at 20 or higher to M15 raised 2024 from +459.3 to +1,088.1 pips, then changed 2025 from +275.1 to −1,005.1. The Tokyo window from 00:00 to 09:00 UTC returned +684.2 pips from 25 H1 trades in 2024 and +679.1 from 32 in 2025. That session was selected after inspecting five filter candidates, so it still needs a separate period before it can be treated as a rule.

A fixed 30-pip stop and 60-pip target also changed with timeframe.

The same 30/60-pip exit is wide relative to M15 and narrow relative to H4.

How much spread can it take?

M15 broke even at 1.52 pips. The five-bar M15 neckline strategy took 225 trades in 2025. It returned +342.6 pips at zero spread, +275.1 at 0.3 pips, +117.6 at 1.0 pip and −107.4 at 2.0 pips.

One spread is charged per completed trade, so the break-even spread is 342.6 ÷ 225 = 1.52 pips. The same setting still returned +76.8 pips at a 2.0-pip spread in 2024. Cost tolerance did not carry over unchanged either.

Notes

The sample is USD/JPY from 1 January 2024 through 31 December 2025. Trades fill at the close with a 0.3-pip spread and 0.1-lot size. No pivot is used before its right-side confirmation bars have closed. When target and failure levels are both touched inside one candle, the outcome remains in a separate same-bar category because OHLC data cannot order the two touches.