Sep-12-2024
A double bottom is, perhaps unsurprisingly, the opposite of a double top. It’s formed when a market’s price has made two attempts to break through a support level and failed. In between, there has been a temporary price rise to a level of resistance. It creates a W-shape.
The double bottom is a bullish reversal pattern because it typically signifies the end of selling pressure and a shift towards an uptrend. Therefore, if the market price breaks through the resistance level, it is likely to continue rising.
As with a double top, it is always worth confirming the resistance level before you open your position. Many traders do this by looking at past price action or using technical indicators.
