A two-trough reversal pattern that looks like the letter W — signals a downtrend has failed at support.
A double bottom is the bullish mirror of a double top. Price falls to a low, rallies, falls again to roughly the same low, and then rallies again. The two troughs form a W. The high between them is the neckline. A break above the neckline confirms the pattern and usually launches a sustained uptrend.
Like the double top, this works because the second test of the low fails. Sellers tried to push price below support and couldn't. That trapped late shorts and emboldened buyers. The neckline break is when those shorts start covering, fueling the rally.
The measured target is the height of the W projected up from the neckline. A 200-pip pattern implies a 200-pip upside target.
EUR/USD printed a daily double bottom at 1.0445 in October and November 2023. The neckline broke at 1.0760 and price rallied to 1.1140 over the following four months — almost a perfect measured move.
Frequently asked about double bottom
What is a double bottom in trading?+
A two-trough reversal pattern that looks like the letter W — signals a downtrend has failed at support.
When will I see double bottom used in real trading?+
At major support zones after long downtrends, often near round numbers, prior swing lows, or major Fibonacci retracement levels.
What is the most common mistake traders make with double bottom?+
Buying inside the W before the neckline breaks. Until the neckline breaks, you're just hoping. The pattern isn't validated until that confirmation.
What do experienced traders know about double bottom that beginners don't?+
Watch volume on the second bottom. If the second test of the low has noticeably LESS volume than the first, sellers are exhausted. That's the highest probability variant of the pattern.
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