Double Bottom
Well-DocumentedA bullish reversal pattern shaped like the letter "W": price falls to a trough, bounces to a resistance level, falls again to a similar trough, then breaks above the resistance.
Candlestick chart falling to a first trough, bouncing to a resistance level, falling again to a second trough at roughly the same depth, then breaking up decisively through the resistance level.
Sample data — illustrative only, generated to demonstrate this pattern's shape. Not a real security.
Identification Criteria
- Appears after a clear downtrend, not in the middle of a range.
- Two troughs form at approximately the same price level, usually within a few percent of each other.
- A peak between the two troughs establishes a resistance (or "confirmation") level.
- The second trough is often accompanied by lower selling volume than the first — a common sign of exhausted supply.
- Time between the two troughs typically ranges from a few weeks to a few months on daily charts.
Formation Logic
The first trough is a normal low in a downtrend. The bounce and second decline test whether sellers can push through that level again. When the second attempt fails at a similar price, it signals that the prior low represents a genuine demand zone rather than a temporary pause — the balance of power has shifted from sellers to buyers.
Breakout / Confirmation Rule
Confirmation requires a decisive close above the resistance level formed by the peak between the two troughs. Until that close occurs, the "W" shape is only a candidate pattern.
Measured-Move Price Target
A common illustrative measured-move technique: take the vertical distance from the troughs up to the resistance (confirmation) level, then project that same distance above the breakout point. Treat this as a rough planning heuristic, not a precise forecast.
Common Pitfalls
- Calling the pattern before resistance actually breaks — the second trough alone is not confirmation.
- Two troughs that differ by more than roughly 3-4% are less reliable as a genuine double bottom.
- Thin trading can produce look-alike "W" shapes that are pure noise.
- A quick break of resistance followed by an equally quick reversal ("bear trap") is common — waiting for a sustained close reduces this risk.