A double bottom is simply the opposite of a double top . This pattern normally occurs during a downtrend and is a signal of a reversal of the downtrend toward an uptrend. It’s easily recognizable by its resemblance to the letter “W”. The initial downward move will find a support at the first bottom and then the price action will rally off the support to a temporary new high
(the middle of the “W”). Another selloff will often take place that will reach the same support level of the first bottom, consequently sparking another upward rally. The trend is confirmed when the price breaks through the upper resistance to complete the pattern and reversal as displayed below. These are the most basic pattern structures of double tops and bottoms that you’re likely to come across. ( cont in our course)
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No part of this book may be reproduced or used in any manner without written permission of the copyright owners except for the use of quotations in a book review.
(the middle of the “W”). Another selloff will often take place that will reach the same support level of the first bottom, consequently sparking another upward rally. The trend is confirmed when the price breaks through the upper resistance to complete the pattern and reversal as displayed below. These are the most basic pattern structures of double tops and bottoms that you’re likely to come across. ( cont in our course)
Copyright 2020 © Alchemy FX All rights reserved.
No part of this book may be reproduced or used in any manner without written permission of the copyright owners except for the use of quotations in a book review.
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