V-Top

A sharp high: price reverses from advance to decline with almost no pause.

Teaching sketch. It shows the shape, not a live quote and not a trade signal.

Definition

A V-top is a spike reversal. The advance does not round over or build a second peak. It turns immediately into a decline of similar force. There is one extreme, then the other direction. It is common around news and blow-off moves.

How to identify it

A steep rise into a single high, then a steep fall, with no handle, no double top, and no distribution base. The high is a pivot that is obvious only after the decline has started.

Bullish reading

A quick reclaim of the spike high voids the top. Many V-tops are retested. A retest that holds under the high is a different pattern, closer to a double top.

Bearish reading

By the time you can name it, price has already fallen. Traders who use it place risk above the spike high and require the decline to break a prior swing, so the V is not just a pullback.

Common mistakes

Shorting the first red candle after a rally and calling it a V-top. A V is defined by the size and speed of the give-back, which you do not know on bar one.

Limitations

Spike tops are hard to sell with a good risk, because the high is far from the confirmation. They are easier to recognise than to trade.

This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.