DOUBLE BOTTOM REVERSAL

The DOUBLE BOTTOM REVERSAL is a bullish reversal pattern, there are two consecutive troughs that are roughly equal, a moderate peak between the two troughs, it gives a signal that at least an intermediate change in trend from bearish to bullish if a key resistance is broken.

The process of a double bottom reversal pattern is as follows:

Step 1-Prior trend: several down bars appear.

Step 2-The first trough: The lowest point takes place.

Step 3-Peak: An advance takes place, the range is from 10 to 20% as compared to the first trough.

Step 4-The second trough: Price goes down, there is a support of the first trough, price testing takes place around the support level the support level must be reconfirmed.

Step 5-Advance from the second trough with one or two gaps

Step 6-Resistance from the peak Break: If the resistance from the peak level broken, the double bottom pattern is complete.

Step 7-Resistance becomes  support: The broken resistance now can becomes a potential support.