A double bottom is a technical analysis chart pattern in forex trading that indicates a potential reversal of a downtrend. It forms when the price hits a low, bounces back, and then falls to a similar low before rising again.
The double bottom pattern is characterized by:
1. Two distinct lows (the "bottoms") at roughly the same price level
2. A peak in between the two lows
This pattern suggests that the price has found support at the lower level and is likely to reverse, moving upwards. Traders often look for a breakout above the peak between the two lows as confirmation of the reversal.
