How to trade the double top on XAUUSD

A double top is two attempts to extend an uptrend that fail at roughly the same price, separated by a pullback. The low of that pullback is the neckline. A close below the neckline is the confirmation that buyers gave up at the level.

Double tops do not need to be exact. The two highs can differ by a few dollars on XAUUSD and still count, as long as the second push clearly failed at the same liquidity zone the first one did.

The structure matters more than the exact symmetry.

• Established uptrend leading into the first high — not a sideways grind
• Pullback between the two highs is real, not a one-bar wick
• Second high prints within a tight band of the first (a small overshoot is fine and often healthier)
• Momentum on the second push is visibly weaker than the first
• Neckline is the lowest point of the pullback between the two tops

Three entry styles. Aggressive: sell the second high as it rejects, before the neckline breaks. Standard: sell the close below the neckline. Patient: wait for the break, then sell the retest of the broken neckline from below.

Stop goes above the second high for the aggressive entry, above the retest swing for the patient one. Target the height of the pattern measured down from the neckline, or the nearest meaningful support — daily structure, prior session lows, round numbers on gold.

Double tops fail when the level was not really a level. Common ways it traps traders:

• The second high is actually a stop run that sweeps the first high before reversing — looks like a double top but is a liquidity grab
• Neckline break is a single news candle that closes back inside
• The uptrend was strong and the second top is a re-accumulation before continuation
• Trader drew the neckline at the wrong pullback (deeper or shallower than the actual swing low)

Run replay across XAUUSD daily and 1-hour charts in periods you know contained reversals, then look for the double tops that worked. Now run the same drill on trending months and see how many times you would have called a top that was just a pause.

The most useful exercise is forcing yourself to mark the second top at the bar where it prints, not afterward. Pause replay one candle at a time and ask: would I have shorted this in real time?