Double bottom - BALUSDT Review 📚Good day everyone.
Today I'll be discussing on the double bottom trend reversal pattern.
1. DEFINITION
What is a Double Bottom?
A double bottom pattern is a technical analysis charting pattern that describes a change in trend and a momentum reversal from prior leading price action. It describes the drop of a stock or index, a rebound, another drop to the same or similar level as the original drop, and finally another rebound. The double bottom looks like the letter "W". The twice-touched low is considered a support level.
2. ENTRY
The entry ( buy order) in double bottom pattern is placed just above the neckline resistance.
3. TARGET ( TAKE PROFIT)
The target of a double bottom pattern = the distance of the bottom head to the neckline resistance.
When a double bottom is spotted in a channel or rectangular pattern support. Your target should be the channel resistance and rectangular pattern resistance respectively.
4. STOP LOSS AND SETUP INVALIDATION
The setup invalidation is a breakdown below the double bottom support.
The stop loss is half the distance of the setup invalidation.
5.TRADE EXAMPLE
I'll be using my analysis on BALUSDT as a trade example on double bottom.
The trade played out as expected from my previous analysis.
My buy entry ⬆️ - breakout above the double bottom neckline resistance.
My targets 🎯 - previous swing high, ascending channel resistance.
My setup invalidation ❌ - breakdown below the double bottom support + ascending channel support.
My stop loss 🔴 - setup invalidation / 2.
