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Double Bottom Forex Pattern

The double bottom formation is a mirror image of the double top pattern. Therefore, one may apply the same characteristics, potential problems, signals, and trader's point of view of the double top pattern.

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The bottoms have about the same amplitude. A parallel line (the neckline) is drawn against the line connecting the two bottoms (B and D.)

As a support line, it is broken at point A. It turns into a strong resistance for price level at C, but eventually fails at point E.

The resistance line turns into a strong support line, which holds the market backlash at point F. The price objective is at level G, which is the average height of the bottoms, measured from point E. (See the dotted lines).

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