Forex Double Bottom Chart Pattern

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Written by Jef De Wilde

The double bottom is the opposite of the double top and is considered to be a major reversal chart pattern after a strong down trending market. The trading pattern is formed by two bottoms that are almost similar in height with a neckline (temporary high) in between. The pattern is confirmed on a sustained break of the neckline.


Forex Double Bottom Chart Pattern Example (NZD/USD 1 Hour Chart)


Forex Double Bottom Trading Ideas

Conservative forex traders: wait for a sustained break of the neckline (breaking temporary resistance).
Aggressive forex traders: buy in the vicinity of the second bottom. Look for bullish reversal candlestick patterns to enter a low risk - high reward trade.
Tip: In case you have missed the double bottom price breakout - After the sustained break, a small retracement back to the neckline is very common.



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