📈 Double Bottom Pattern – Bullish Reversal Signal

The Double Bottom pattern is a classic bullish reversal formation that occurs after a downtrend. It signals that selling pressure is weakening and buyers are gaining strength.

📘 What Is the Double Bottom Pattern?

The Double Bottom is a reversal pattern shaped like the letter "W." It occurs after a downtrend and consists of two lows (bottoms) at approximately the same price level separated by a peak (neckline). Breaking above the neckline confirms a bullish reversal.

• Occurs after a clear downtrend.
• Two lows (bottoms) at roughly the same level indicate strong support.
• The peak between the lows forms the neckline.
• Break above the neckline signals a bullish trend reversal.
  
  
  

💡 Market Psychology

- First Bottom: Sellers push prices lower, but buyers enter near support. - Second Bottom: Sellers test the support again but fail to break it, showing strong buying pressure. - Neckline Break: Confirms that buyers have gained control, and an uptrend is likely to follow.

✅ Pro Tip: Volume often rises on the breakout above the neckline, confirming the bullish reversal.

⚙️ How to Trade Double Bottom

1. Identify the two lows forming the "W" shape after a downtrend.
2. Draw the neckline at the peak between the two bottoms.
3. Enter a buy (long) position after price closes above the neckline.
4. Place a stop-loss below the second bottom.
5. Set a target equal to the height from the bottoms to the neckline projected upward.
   
   
   

🏁 Conclusion

The Double Bottom pattern is a reliable bullish reversal indicator. Recognizing it early and confirming with volume and resistance levels can help traders identify strong buying opportunities.

“When the Double Bottom forms — the market finds support, and the bulls take charge.”