Double bottom pattern
Two failed attempts to break the same low, then a break of the neckline: the downtrend has lost its push.
Try Double bottom pattern on a real day
A real market day with the date hidden. Run the checklist on the chart, then buy, sell or stay out: the real candles answer.
Check every point of the list before you decide. Stay out if the setup is not there.
The double bottom, or "W", is one of the best-known reversal patterns. Its logic is simple: sellers tried twice to push price below the same level and failed both times.
Why it works
The first low stops the decline. The rally that follows sets the neckline. The second low tests the support again; if it holds, sellers are exhausted.
The pattern is only confirmed when price breaks the neckline. Before that, it is just a range.
The rules
Setup
- A downtrend reaches a low, rallies and returns to the same area (within about 0.5× ATR).
- The second low ideally shows a rejection candle or weaker momentum.
Entry
- Buy on a close above the neckline (the high between the two lows).
Stop loss
- Below the lower of the two lows.
Exit and management
- Target: the height from the lows to the neckline, added to the neckline.
Filters that improve it
- Lows separated by at least 10 bars are more meaningful.
- Bullish divergence on RSI at the second low adds confirmation.
Worked example
Illustrative EUR/USD example on 4H: lows at 1.0700 and 1.0705, neckline at 1.0790. A close at 1.0798 triggers the buy; stop at 1.0690; target 1.0880.
Illustrative numbers, not a recommendation.
Common mistakes
- Buying the second low before the neckline breaks.
- Calling two random lows a double bottom without a prior downtrend.
How to practise it
In Candlemind mark the two lows and the neckline. Use the lesson's ruler to measure the target before you enter.
Pre-trade checklist
- Prior downtrend
- Two lows at the same level
- Neckline marked
- Close above the neckline
- Measured-move target
Frequently asked questions
How reliable is the double bottom?
It is one of the more reliable reversal patterns once the neckline breaks. Before the break it fails often.
What is the opposite pattern?
The double top, or "M", a bearish reversal.