How to spot a Double Bottom
- Forms after a downtrend
- Two lows at roughly the same level
- The bounce high between them forms the neckline
- Completes on a close above the neckline
What the Double Bottom tells you
Buyers defend the same price twice. When the neckline breaks, the market has made a higher high and the downtrend is in doubt.
How traders use it
- Enter long on a close above the neckline or on its retest
- Place the stop below the second bottom
- A common target is the height of the pattern projected up from the neckline
Common mistakes
- Buying the second bottom with no confirmation
- Forgetting that equal lows attract stop hunts
- Ignoring volume on the breakout
See it on a real chart · EP 02Support & Resistance: How to Draw ThemWatch the free lesson →
Questions about the Double Bottom
Is a double bottom bullish?
Yes. It signals a possible reversal from down to up, confirmed when price closes above the neckline.
Can the two bottoms be at slightly different prices?
Yes. They only need to be close. A second bottom that dips slightly lower and recovers can even be a stronger sign.
For education only, not financial advice. The chart is an illustration of the pattern, not real market data. No pattern works every time; always use a stop-loss.