What is Double Bottom Reversal? The double bottom looks like the letter "W". The twice touched low is considered a support level. It is important to remember that the Double Bottom Reversal is an intermediate to long-term reversal pattern that will not form in a few days. Even though formation in a few weeks is possible, it is preferable to have at least 4 weeks between lows. Bottoms usually take longer than tops to form and patience can often be virtue. Give the pattern time to develop and look for the proper clues. The advantage off of the first trough should be 10-20%. The second trough should form a low within 3% of the previous low and volume on the ensuing advance increase. Just as with the double top, it is paramount to wait for the resistance breakout. The formation is not complete until the previous reaction high is taken out.
Posted on: Mon, 05 Aug 2013 23:18:53 +0000
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