Low Risk, High Reward: Mastering the Double Bottom Setup
The chart highlights a textbook Double Bottom — one of the most reliable bullish reversal patterns in technical analysis. Typically forming after a strong downtrend, this “W”-shaped structure signals that bearish momentum is fading.
Notice the two distinct troughs (Bottom 1 and Bottom 2) around the same support zone. The breakout trigger is the neckline — once price breaks above it, the reversal is confirmed.
What follows is often a retest of the neckline, offering a second-chance, low-risk entry before the real rally begins. As shown in the green zone, this move can lead to a strong upside — high reward with limited downside.
This setup blends precision with smart risk management, making it a go-to strategy for seasoned traders. Discipline and patience are key to capitalizing on its full potential.