What's Double Bottoms Patterns?
Trading Identify a Double Bottoms Pattern in XAUUSD Trading
The Best Patterns Course for New Traders - How to Identify & Trade Double Bottoms Chart Pattern
Pattern Setups for Intra-day Trading - Patterns Guide
This Double Bottoms trading patterns charts guide explains how to identify xauusd setups - identifying chart patterns is the first step when it comes to learning how to trade with Double Bottoms chart patterns in Gold.
Double Bottoms trading price setups commonly form on Gold charts & this chart pattern analysis guide explains how to trade & analyze gold charts using Double Bottoms trading setups.
Double Bottom Pattern
Double bottoms pattern setup is a reversal gold pattern setup which forms after an extended down ward trend. Double bottoms chart pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in between.
This double bottoms pattern formation is considered complete once trading price makes the second low & then penetrates the highest point between the lows, known as the neck-line. The buy indication from this bottoming out signal occurs when the market breaks-out the neckline to the upside.
In XAUUSD, this double bottoms setup formation is an early warning signal that the bearish Gold trend is about to reverse. It is only considered complete/completed once the neck-line is broken. In this double bottoms pattern setup formation the neckline is the resistance zone for the price. Once this resistance is breached the market will move upwards.
Summary:
- Double bottoms trading setup forms after an extended move downwards
- This Double bottoms chart pattern formation shows that there will be a reversal in the market
- We buy when price breaks-out above neckline point: see below for the explanation.
Double Bottom Pattern
The double bottom chart setup look like a W Shape, the best reversal gold signal is where the second bottom is higher than the first one as pictured below, this means that the reversal setup can be confirmed by drawing an upwards gold trend-line as illustrated below. If one opens a buy signal the stop loss will be placed just below this up-wards trend-line.
W Shaped Double Bottoms Pattern
Learn More Tutorials and Topics:
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- How to Add MACD Indicator on Gold Chart in MT4 Software
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