Double Bottom
Chart PatternsA bullish reversal pattern where the price reaches the same low twice with a bounce in between, forming a "W" shape. The break above the middle peak confirms the reversal.
What Is a Double Bottom?
The double bottom is a bullish reversal pattern shaped like the letter W. The price declines to a Support level, bounces up, declines again to approximately the same level, and then rallies. The two lows should be close in price, showing that buyers defended the same zone twice.
This pattern shows that sellers attempted to break through support twice and failed, indicating strong demand at that level.
How to Trade a Double Bottom
The neckline is the high between the two bottoms. When price breaks above this level on USD/JPY, enter long. Place a stop below the two lows. The target is the height of the pattern projected upward from the breakout point.
A pullback to the broken neckline (now acting as Support) after the breakout is common and offers a second chance to enter with tighter risk.
Time Between Bottoms
A wider time gap between the two lows generally creates a more significant pattern. Double bottoms that form over several weeks on a daily chart tend to produce larger reversals than those forming over a few hours on an intraday chart. For a deeper guide on chart reading, see Forex Trading for Beginners.
Related Terms
Double Top
A bearish reversal pattern where the price reaches the same high twice with a pullback in between, forming an "M" shape. The break below the middle trough confirms the reversal.
Triple Bottom
A bullish reversal pattern where the price tests the same support level three times, bouncing each time. The break above the resistance connecting the bounce highs confirms the pattern.
Inverse Head and Shoulders
A bullish reversal chart pattern with three troughs where the middle trough (head) is the lowest. The neckline break above confirms the reversal from a downtrend.