How Can I Tell A Double Bottom Chart Pattern?
Trade Double Bottoms
A double bottom setup is a reversal chart pattern used to analyze when the market direction might reverse and start moving in opposite market direction.
A double bottom reversal chart pattern occurs at the bottom of a downward trend & double bottom chart pattern signals that the downward trend might reverse and start heading in opposite market direction.
To identify a double bottoms chart pattern traders will need to look for two consecutive bottoms that occur after an extended xauusd down-wards trend.
The two consecutive bottoms are what form the pattern known as double bottoms patterns
To trade a double bottoms chart pattern traders will wait until the price closes above the neckline of this double bottoms chart pattern and after price closes above the neckline of the double bottoms chart pattern then the reversal signal will be confirmed and traders can open buy xauusd transactions using this double bottoms chart pattern.
Double Bottoms Reversal Pattern
Double bottom down trend reversal pattern is a reversal pattern which forms after an extended downward trend. Double bottom down trend reversal chart pattern setup is made up of two consecutive troughs that are roughly equal, with a moderate peak in between.
Double bottom down trend reversal chart pattern formation is considered complete once price makes second low & then penetrates the highest point between lows, called the neck-line. The buy signal from this price bottoming out signal occurs when the price breaks the neckline to the upside.
In XAUUSD, Double bottom down trend reversal chart pattern setup formation is an early warning signal that the bearish trend is ready to reverse.
Double bottom down trend reversal chart setup is only considered confirmed once the neckline is broken. In this double bottoms downtrend reversal pattern formation the neck line is the resistance zone for the price. Once this resistance is breached the price will move upwards.
Summary:
- Double bottom down trend reversal chart pattern setup forms after an extended move downwards
- This Double bottoms downward trend reversal chart pattern indicates that there will be a reversal in the price
- Buy when the price breaks above the neck line: double bottoms reversal pattern.
How Can I Tell a Double Bottoms? - How Can I Tell A Double Bottom Pattern?
The double bottom reversal pattern looks like a W Shape, the best reversal signal is where the second bottoms is higher than the first one as illustrated below, this means that the reversal setup can be confirmed by drawing an up-ward trend-line as explained below.
Gold Trade Double Bottoms
How Can I Tell a Double Bottoms? - How Can I Tell A Double Bottom Chart Pattern? - How to Identify Double Bottom Chart Pattern in XAUUSD - How to Trade Double Bottoms
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