Reversal Patterns · Bullish
Double Bottom
Two similar lows with a rally between them, then a break of the middle high.
Price fails to make a lower low on the second test. The pattern is confirmed when price closes through the high between the two lows, called the neckline.
This is an example of how traders often plan the pattern. It is not a promise that price will reach the target.
Identification
- Two lows form at a similar price.
- A rally between them creates a neckline.
- Confirmation is a close through that neckline, not the second low by itself.
Market context
The second low can be slightly higher or slightly lower. What matters is that selling did not continue.
Entry example
An example entry is the close through the neckline.
Stop-loss example
An example stop is below the lower of the two lows.
Target example
A common teaching method projects the height from the lows to the neckline upward from the break. That is a plan, not a forecast.
Common mistakes
- Buying the second low before the neckline breaks.
Candlestick and chart patterns are probabilistic observations, not guaranteed trading signals. This page does not report a win rate.