best forex trading strategy for Double Bottoms
Published by bestsignals on October 27, 2018
Double Bottoms and best trading strategy
Downward price trend
The short-term price trend leading to a double bottom is down.
Two valleys
Look for two valleys that bottom near the same price. Near means within about 5 percent.
The bottoms should look as if they are at the same price.
Valley separation
The time between bottoms varies, but two to seven weeks results in the best performance.
Peak
The peak between the two bottoms should measure at least 10 percent, but exceptions
are numerous, making this guideline almost useless.
Confirmation
Price must close above the highest peak between the two bottoms. If price closes below
the lowest bottom before confirmation, it invalidates the double bottom.
A double bottom is a twin valley pattern with valleys that bottom near the same price.
The double bottom acts as a bullish reversal of the downward price trend.
The time between bottoms and the price variation is less important than confirmation. An unconfirmed double bottom is just squiggles on a price chart
Reversal chart patterns, such as double bottoms, must have something to reverse.
If the price trend leading down to the double bottom is shallow, do not expect a large rise after confirmation.
best trading strategy Trade with market trend To improve your odds, trade this bullish pattern in a bull market.
Measure rule
Compute the height from the highest high between
the two bottoms to the lower of the two bottoms then
add the difference to the highest high. The result is the
target price.