The trough tests whether the old upward structure survives
The second peak shows that the next advance has not clearly exceeded the first. However, price may simply be consolidating before continuing upward. The intervening trough is useful because a break below it demonstrates a failure to maintain that part of the preceding structure. Specify whether a brief low or a completed close counts.
The peaks need not match to the cent, but the tolerance must be stated before the outcome. Also note their separation and the preceding trend. Two adjacent candle highs inside an established range do not automatically form the same reversal structure as two meaningful swing peaks following a sustained advance.
A candidate near 120 and confirmation below 110
Assume an advance produces a first peak at 120 dollars, a trough at 110, and a second peak at 119.50. Under an illustrative rule requiring a completed daily close below 110, a low of 109.70 followed by a 110.80 close has not confirmed the pattern. A later close at 108.90 does. Using the first peak for a simple measured scenario gives height 120 − 110 = 10 dollars and a downward projection of 100. This arithmetic illustrates the convention; it does not imply that price must reach 100.
Candidates can evolve or fail
Price can rebound after a neckline break, form a wider range, or rise above both peaks. Increased compatible volume at a break may add context without guaranteeing follow-through. Gaps can also move price well beyond the assumed confirmation level. A chart pattern does not determine execution price, position size or maximum loss.
Keep candidate, confirmation and outcome separate
On an available completed daily, weekly or monthly chart, mark both peaks and the intervening trough using only information known at the time. Record the tolerance and confirmation condition, then follow the subsequent closes in order. Label any measured projection as a conditional scenario, and retain cases where the candidate never confirmed or the confirmed pattern later failed.
Primary sources
Sources explain the mechanics and limitations; the editorial examples use invented numbers rather than market quotations.
Your next practical step
Inspect the two peaks and test their intervening low using completed candles.
Open the first-chart instructions ↗