Hey traders,
If you are learning price action trading, you definitely must know a double bottom pattern.
Double bottom is a reversal pattern.
It is applied to spot early market reversal clues and catch the initiation of a new bullish trend.
Preconditions for a double bottom:
1ïžâŁ The market must trade in a bearish trend.
2ïžâŁ After a formation of the last lower high, the price must set equal low.
3ïžâŁ The price must return back to the last lower high level.
â Once these conditions are met the pattern is considered to be completed.
The formation of the pattern is considered to be a â ïžWARNING sign.
Even though many traders buy the pattern once it is completed,
for me it is not enough.
âïžRemember that the price can easily start to consolidate and form a horizontal channel for example.
The trigger that we will look for is the breakout (candle close above) the last lower high level (based on a wick and its highest candle close) - the neckline.
Being broken to the upside, the market sets a new higher high.
It signifies a violation of a current bearish trend.
âŹïžAttempting to catch an initiation of a bullish trend, we will buy the market with a buy limit order on a retest of a broken neckline.
âSafest stop will lie below the lows of the pattern.
đ°Your reward must be at least 1.5 of your risk.
Following these simple rules, you will be impressed by how accurate this pattern is!
â€ïžPlease, support this idea with a like and comment!â€ïž
â
Join My Telegram Channel: t.me/VasilyTrading
âïžYouTube Channel www.youtube.com/c/VasilyTrader
đ°Instagram: www.instagram.com/VasilyTrader/ đ°
â Facebook: www.facebook.com/VasilyTrading/ â
âïžYouTube Channel www.youtube.com/c/VasilyTrader
đ°Instagram: www.instagram.com/VasilyTrader/ đ°
â Facebook: www.facebook.com/VasilyTrading/ â