Double Bottom

A double bottom is a bullish reversal pattern that signals the end of a downtrend.

Structure

1. First trough: Price falls to a support level and bounces
2. Peak: Price rallies but fails to sustain momentum
3. Second trough: Price returns to approximately the same level as the first trough
4. Breakout: Price rises above the peak between the two troughs

Measuring the target

Target = Breakout level + (Peak level − Trough level)

What to watch for

• The two troughs should be at roughly the same price level (within 3–4%)
• Volume often increases on the second bounce and the breakout
• The pattern is confirmed only when price breaks above the middle peak

Double top (bearish version)

The inverse pattern with two peaks at the same level, signaling a potential trend reversal downward. Same measurement technique applies in reverse.

Common mistakes

• Trading before the breakout confirmation
• Ignoring volume patterns
• Confusing normal support bounces with double bottom formations