What it looks like
Two swing highs within a few points of each other, separated by a dip. On gold that might be within 1 to 2 points on a 15 minute chart; on US30, within 10 to 20 points. The tops line up so clearly that most traders see them.
What it means
Traders who sell near equal highs put stops just above, and breakout buyers place orders there as well. That cluster is liquidity. Price is often drawn up to it, fills those orders and then turns. Equal highs are better read as a likely target for the next push up than as a reliable ceiling.
How to trade it
- 1
Mark the equal highs and treat the area just above them as a target.
- 2
Confirmation: price trades above the highs and a candle closes back below them.
- 3
Entry: sell on that close back below the level.
- 4
Stop: above the highest point of the sweep. Example on US30: equal highs at 47,250, a sweep to 47,285, a close at 47,235. Sell at 47,235, stop at 47,300, a 65 point risk.
- 5
Target: the low between the two highs, or the next level below.
Price closes above the equal highs and stays there.
Where it works best
On intraday charts of gold and indices, particularly around the London and New York opens, when stops above obvious highs are commonly run.
WickSpeak marks equal highs automatically and names them on the candles that made them. Each note says what they are, how traders handle the sweep and that a close above the level that holds proves it wrong. In Playbook you can use it as a condition in a play, alone or alongside other patterns and indicators (any of the 146 patterns can be a condition), and backtest it on past candles with your own costs.
Common mistakes
- Selling right at the equal highs as if they were a solid ceiling.
- Buying the first break above, which is often the sweep that traps buyers.
- Ignoring a strong uptrend, where price may break the highs and keep going.
Related patterns
Questions traders ask
What are equal highs?
Two swing highs at almost the same price. Stop orders gather just above them, which makes the area a target for price.
Do equal highs act as resistance?
Sometimes, but they are often taken out first. Many traders wait for price to poke above and close back below before selling.
What is buy side liquidity?
It is the pool of buy orders, mostly stops from sellers and breakout entries, that sits above obvious highs such as equal highs. Large traders can sell into those orders.
When is the equal highs idea wrong?
When price closes above the highs and holds. That means buyers took the level and the expected snap back has not come.