The double bottom is a classic bullish reversal pattern in technical analysis. It resembles the letter "W", forming after a downtrend when the price hits a support level twice before breaking out upwards.
Key Features:
- Two distinct lows at roughly the same price level.
- A peak (neckline) between the two lows.
- Breakout confirmation when the price moves above the neckline.
Trading Strategy:
- Entry: Traders often enter a long position once the price breaks above the neckline.
- Stop-loss: Placed below the second bottom to manage risk.
- Target price: Typically measured by the distance between the neckline and the bottoms, projected upwards.
Key Features:
- Two distinct lows at roughly the same price level.
- A peak (neckline) between the two lows.
- Breakout confirmation when the price moves above the neckline.
Trading Strategy:
- Entry: Traders often enter a long position once the price breaks above the neckline.
- Stop-loss: Placed below the second bottom to manage risk.
- Target price: Typically measured by the distance between the neckline and the bottoms, projected upwards.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.