What is a Double Bottom Pattern?
Double Bottom
Forex Trading Glossary
Quick Answer: A double bottom is a bullish reversal pattern with two troughs at similar levels, showing buyers are defending support. Confirmed when price breaks resistance between the bottoms.
What is a Double Bottom?
A double bottom mirrors the double top but signals accumulation. Price tests the same support twice, finds buyers each time, and breaks higher when supply dries up.
Structure
- Two swing lows: Lows print near the same level with a bounce between them.
- Neckline resistance: The interim high forms the trigger level.
- Volume pickup: Breakouts often carry increased participation.
Reversal Plan
After confirmation above the neckline, traders often place stops under the second low and aim for the pattern height projected upward.
Checklist
- Confirm the prior trend was bearish enough to justify a reversal.
- Look for momentum divergence or higher lows on oscillators.
- Use pullbacks to the neckline to build positions with controlled risk.
- Manage targets around former resistance zones.
Related Terms
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