Double Bottom

The double bottom pattern is the opposite of the double top pattern signaling the beginning of a new trend. As a rule, it occurs in the local base of the asset and tests the support level twice. The development of this pattern involves a breakdown of the resistance level, after which the quotes test the broken resistance. After that, the price bounces higher to the level of the side channel height, which formed between the support and resistance lines.

You can see an example of this pattern in the 30 minute ETHUSD chart.

The picture below shows the formation of the pattern. After the formation of the second bottom, the asset rushed towards the resistance, which it overcame and tested again, consolidating higher.

We could make a buy trade after the instrument consolidated above the resistance. The price movements are equal to the height of the side channel between the support and resistance lines.

The trade could be closed at two points. Stop loss in this case should be placed lower, in accordance with the risk management rules#