Is a Double Bottom Chart Pattern Bullish or Bearish?

A double bottom chart pattern has a W shape and it occurs at a market bottom hence its name double bottom chart pattern and it signals a bullish price reversal in the forex trading market.

Once a double bottom chart pattern is confirmed then the market will be considered to be bullish, therefore a double bottoms is bullish.

Double Bottoms Pattern

Double bottoms forex pattern is a reversal pattern which forms after an extended downtrend. Double bottoms forex trading pattern is made up of two consecutive troughs which are roughly equal, with a moderate peak between.

This double bottoms pattern formation is considered complete once price makes second low and then penetrates the highest point between the lows, called the neck line. The buy indication from this bottoming out signal occurs when market breaks-out the neckline to the upside.

In Forex, this double bottom pattern formation is an early warning signal that the bearish trend is about to reverse. It is only considered complete/completed once the neck-line is broken. In this double bottoms pattern formation the neck line is the resistance level for the price. Once this resistance is broken the market will move up.

Summary:

• Double bottom chart pattern forms after an extended move downwards
• This Double bottoms pattern formation indicates that there will be a reversal in market
• We buy when price breaks above the neckline: see below for explanation.

Double Bottoms Pattern - Is a Double Bottom Chart Pattern Bullish or Bearish?