Double bottom reversal
the pattern is made up of two 外汇交易心得 consecutive troughs that are roughly equal, with a moderate peak 外汇交易心得 in-between.
Note that a Double Bottom Reversal on a bar or 外汇交易心得 line chart is completely different from Double Bottom Breakdown on a P&F chart. Namely, Double Bottom Breakdowns on P&F charts 外汇交易心得 are bearish patterns that mark a downside support break.
Although there 外汇交易心得 can be variations, the classic Double Bottom Reversal usually marks an intermediate or long-term change in trend. Many potential Double Bottom Reversals can form during a downtrend, but until key resistance is broken, a reversal cannot be confirmed. To help clarify , we will look at the key points in the formation and then walk through an example.
Prior Trend: With any reversal pattern, there must be an existing trend to reverse. In the case of the Double Bottom Reversal, a significant downtrend of several months should be in place.
First Trough: The first 外汇交易心得 外汇交易心得 trough should mark the lowest point of the current trend. As such, the first trough is fairly normal in appearance and the downtrend remains firmly in place.
Peak: After the first trough, an advance takes place that typically ranges from 10 to 20%. Volume on the advance from the first trough is usually inconsequential, but an increase could signal early accumulation. The high 外汇交易心得 of the peak is sometimes rounded or drawn out a bit from the hesitation to go back down. This hesitation indicates that demand is increasing, but still not strong enough for a breakout.
Second Trough: The decline off of the reaction high usually occurs with low volume and meets support from the previous low. Support from the previous low should be expected. Even after establishing support, only the possibility of a Double Bottom Reversal exists, and it still needs to be confirmed. The time period between troughs can vary from a few weeks to many months, with the norm being 1-3 months. While exact troughs are preferable, there is some room to maneuver; typically, 外汇交易心得 a trough within 3% of its predecessor is considered valid.
Advance From Trough: Volume is more important for the Double Bottom 外汇交易心得 Reversal than the double top. There should be clear evidence that volume and buying pressure are accelerating during the advance off of the second trough. An accelerated ascent, perhaps marked with a gap or two , also indicates a potential change in 外汇交易心得 sentiment.
Resistance Break: Even after trading up to resistance, the double top and trend reversal are still not complete. Breaking resistance from the highest point between the troughs completes the Double Bottom Reversal. Like advances, these should occur with an increase in volume and/or an accelerated ascent.
Resistance Turned Support: Broken resistance becomes potential support and there is sometimes a test of this newfound support level with the first correction. Such a test 外汇交易心得 can offer a second chance to close a short position or initiate a long.
Price Target: The distance from the resistance 外汇交易心得 breakout to trough lows can be added on top of the resistance break to estimate a target. This would imply that the bigger the formation is, the larger the potential advance.
It is important to remember that the Double Bottom Reversal is an intermediate to long-term reversal pattern that will not form in a few days. Even though formation in a few weeks is possible, it is preferable to have at least 4 weeks between lows. Bottoms usually take longer to form than tops; patience can often be a virtue.
Grow Your Advisory Practice
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A comprehensive marketing plan is a great 外汇交易心得 starting point, but to experience true success you need to optimize and refine your strategy. This includes tracking your referrals and being responsive to feedback from clients and prospects.
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Yarnway believes that measuring leads in 外汇交易心得 外汇交易心得 this way has been crucial to his firm's success. “These people are giving me their information on how they're reaching us and that gives me the data that I need to lean into more of what's working and say no to the things that are not working,” he explains.