Reversal Chart Pattern
What is a double bottom pattern in trading?
A double bottom is two troughs at roughly the same level with a rally between them — the mirror of a double top — read as a sign sellers failed to push through the same support twice. Here is how to identify one, how it is typically traded, and what it does not tell you.
What it is
Two troughs at a similar level, with a rally between them
A double bottom forms when price falls to a support level, rallies, falls again to roughly the same level, and fails to push meaningfully lower a second time. The high of the rally between the two troughs is the confirmation line. It is the exact mirror of a double top: two failed attempts to break the same level, this time on the downside.
- 01
Look for a prior downtrend into the first trough
A double bottom only reads as a reversal if there was a downtrend for it to reverse. Two troughs inside a range that was never trending down are not read the same way.
- 02
Allow a margin around the two trough levels
As with a double top, the two troughs rarely land at the exact same price. A small difference is normal and does not disqualify the pattern on its own.
- 03
Watch the volume on the second trough
It is common for the second trough to form on lighter volume than the first — a shrinking reaction rather than a stronger one, which is often read as selling pressure fading rather than intensifying.
- 04
Wait for a close above the confirmation line
Two troughs holding the same level is support holding twice, not yet a confirmed reversal. A close above the rally high between the troughs is what confirms the pattern.
How it's traded
The confirmation-line break is the mechanical trigger
The common approach enters on, or shortly after, a close above the confirmation line rather than at the second trough itself, since a failed breakdown is not the same as an actual reversal. A stop is typically placed below the lower of the two troughs, since a move back below both troughs undermines the read that support held twice. A frequently used target measures the distance from the troughs up to the confirmation line and projects that same distance upward from the break.
Common mistakes
Buying the second trough before the confirmation line breaks
The most common mistake is buying as soon as price holds near the first trough's level a second time, without waiting for the close above the confirmation line — support holding twice is common on its own and most instances are not double bottoms. A second is ignoring the volume comparison between the two troughs entirely; a second trough on noticeably heavier volume than the first is a weaker signal than the textbook description implies, and treating every double bottom shape the same regardless of volume misses that distinction. A third is requiring the two troughs to match exactly and dismissing an otherwise valid pattern over a small price difference.
Limits
What a double bottom does not tell you
It does not tell you how far the move up will run — the measured-move target is a rule of thumb, not a guarantee, and plenty of double bottoms break the confirmation line and stall well short of the projection. It does not tell you whether the break is genuine or a shakeout that falls back below the confirmation line within a few bars. And on lower timeframes, two troughs at a similar level occur constantly without any real follow-through, so the pattern is considerably noisier intraday than the clean daily-chart examples typically used to teach it.
Test the double bottom rule before you trade it
Spotting two troughs on a chart you already know the outcome of proves nothing. Traders Journal's backtesting steps through price history bar by bar, so you can mark every confirmation-line break the pattern actually produced and record what happened next — including the failed ones.
Explore backtestingQuestions
What is a double bottom pattern in trading?
Two troughs at roughly the same level, separated by a rally, that form after a downtrend. It is read as sellers failing to push through the same support twice, and it is not treated as confirmed until price closes above the high of the rally between the two troughs.
Do the two troughs in a double bottom have to be at the exact same price?
No. A small difference between the two trough levels is normal and does not disqualify the pattern — allow a reasonable margin, and treat the confirmation-line break, not an exact price match, as the actual signal.
Why does volume matter on the second trough of a double bottom?
A second trough on lighter volume than the first is commonly read as selling pressure fading, which supports the reversal case. A second trough on heavier volume than the first suggests sellers are still active at that level, which weakens the case even if the price shape still looks like a textbook double bottom.
Where do traders typically place a stop on a double bottom trade?
A common placement is below the lower of the two troughs, since a close back below both troughs means support did not actually hold twice. A tighter alternative is just below the confirmation-line break point, which cuts losses faster but gets stopped out by more of the ordinary chop that follows a break.
What is the difference between a double bottom and an inverse head and shoulders?
A double bottom has two troughs at a similar level. An inverse head and shoulders has three, with the middle trough clearly lower than the two either side. Both are bottoming patterns confirmed by a close through a line drawn above the rally highs, but the number and shape of the troughs differ.