Today I'll be discussing on the trend reversal pattern.
What is a Double Bottom?
A pattern is a 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 looks like the letter "W". The twice-touched low is considered a .
The entry ( buy order) in pattern is placed just above the neckline resistance.
3. TARGET ( TAKE PROFIT)
The target of a pattern = the distance of the bottom head to the neckline resistance.
When a 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 support.
The stop loss is half the distance of the setup invalidation.
I'll be using my analysis on BALUSDT as a trade example on .
The trade played out as expected from my previous analysis.
My buy entry ⬆️ - breakout above the neckline resistance.
My targets 🎯 - previous swing high, resistance.
My setup invalidation ❌ - breakdown below the support + support.
My stop loss 🔴 - setup invalidation / 2.