Reversal Pattern The Double Bottoms A downward price trend bottoms out, rises, then bottoms again before climbing. Turning into a “W” Shape formation. #The Shape of The Double Bottom – A double bottom occurs when prices form two distinct bottoms on a chart. A double bottom is only complete, however, when prices climb above the highest high point between the two bottoms. The double bottom is a reversal pattern of a downward trend in a stock’s price. Sometimes called a “W” formation because of the pattern it creates on the chart, the double bottoms are also one of the most frequently seen and common of the patterns along with double tops Because they seem to be so easy to identify, the double bottoms should be approached with caution by the investor. #Formation of The Double Bottom – Leading to the formation, prices trend downward over the short to intermediate term (3 to 6 months) and usually do not fall below the left Bottom. There should be at least a 10% upside between the two bottom, measured from low to high. Two distinct Bottoms with a price variation between peaks of 3% or less. This is not crucial except that the two Bottoms should appear near the same price level and not be part of the same consolidation pattern. #Duration of The Double Bottom – The Double Bottom has a minimum duration of 3 weeks and it rarely exceeds 3 or 4 months long. Anything less than 3 weeks of duration likely to be a pennant formation, not a Double Bottom. #Breakout – The confirmation point is the highest high between the two Bottoms, neckline, Prices closing above the neckline confirm a double Bottom and the breakout. HOW TO TRADE THE DOUBLE BOTTOMS Trading Rules. #Most Important Part In Trading.# Ever felt you are getting enough trading calls right, but aren’t still making significant profits? An unfavourable risk-reward ratio could be the answer. What is the point if you are losing big and earning small? Learn to trade patterns like a pro to get maximum profit out of it. http://www.equityearningz.com/portfolio-item/double-bottoms/ #stockmarkets #doublebottom #chartpatterns #positionaltrading #sbin #stock #investing #stockmarket #stockmarkets #stockmarketanalysis https://www.instagram.com/p/Bl05N-_ni8V/?utm_source=ig_tumblr_share&igshid=1c1ee0ekgghq5