Forex glossary
Double Bottom
A double bottom is a classic structure of two similar lows separated by a peak after a decline. Breaking that peak, the neckline, completes the pattern interpreted as a possible reversal. Level tolerance and breakout rules depend on the method; continued gains are not guaranteed.
Illustrative example
How does it work in practice?
Assume EUR/USD lows at 1.0900 and 1.0903, with an intervening peak at 1.1000. A close above 1.1000 completes the hypothetical double-bottom structure under the chosen breakout rule.
A case to work through
No neckline break yet
Hypothetically, troughs are 90 and 90.3, the intervening peak is 96 and the latest close is 95.
- Two similar troughs form a candidate, but price has not closed above 96.
- Under a close-above-neckline rule, the structure remains incomplete.
What follows? Keep candidate status and specify the break requirement.
Example boundary: Similar geometry may remain a consolidation; a height-based target is not a forecast.
A useful distinction
Double Bottom / Double Top
A double bottom checks a break of the peak between troughs; a double top checks the trough between peaks.
Check your understanding
Check the completion condition for a double bottom.
Show the answer and explanation
A candidate without completion under the close rule
The close has not exceeded 96.
Geometry and pattern completion
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Related terms
Sources and documentation
- StockCharts – double bottom
Two troughs and the intervening peak's break as classical completion.
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