Reversal patterns
Double bottom
Usually bullish
Two roughly equal lows separated by a bounce, with the high between them forming the confirmation level.
What a double bottom tells you
Price tested a floor, bounced, came back, and held. The second hold is evidence that supply at that level is exhausted. Confirmation is a close above the middle high.
Why it forms
Sellers who wanted out near the lows have mostly gone. Buyers who missed the first bounce step in earlier the second time.
How traders enter it
Entry on the close above the middle high, or on a retest of it from above. Objective is the pattern height projected up.
How it fails
In a strong downtrend the second low often undercuts the first by a few percent before reversing, and buyers placing stops directly under the first low get taken out just before the move.
That last section is the one worth rereading. A pattern is only useful because it comes with a level that proves you wrong — without one you have a shape and a hope.
People also ask
Is a double bottom bullish or bearish?
A double bottom is usually read as bullish, but only once it confirms. Before the confirming break it is a shape, and shapes fail. Context decides more than the label does.
How do you trade a double bottom?
Entry on the close above the middle high, or on a retest of it from above. Objective is the pattern height projected up.
When does a double bottom fail?
In a strong downtrend the second low often undercuts the first by a few percent before reversing, and buyers placing stops directly under the first low get taken out just before the move.
Can ChartLens spot a double bottom for me?
Yes. Photograph or screenshot any chart and ChartLens names the pattern if it is clearly formed, with a confidence level and whether it is forming, confirmed or failed — and says nothing if it is not there.
Last updated .