Trading
Charts 101CandlesticksIndicatorsRisk managementAll chart patternsHead and shouldersInverse head and shouldersDouble topDouble bottomAscending triangleDescending triangleBull flagBear flagCup and handleFalling wedgeRising wedgeSupport and resistanceTriple topTriple bottomSymmetrical triangleRounding bottomPennantRectangleAscending channelDescending channelBroadening formationGolden crossDeath crossBart patternWyckoff accumulationWyckoff distributionWhat moves marketsTradingViewMarket cap vs price
The short answer
Two tests of the same low that both hold.
What you are looking at
Price falls to a level, bounces, falls back to the same level, and holds. Often called a W.
How traders act on it
The signal is a close above the peak between the two lows.
Closes, not touches
Wait for a close beyond the level, not a touch. Intraday spikes through a level that reverse before the close are extremely common, and they exist partly because so many stops sit just beyond.When it fails
A close below both lows invalidates it and often accelerates the downtrend.
Failure is normal and it is not a problem, provided you decided your invalidation level before entering and sized the position so that being wrong is survivable. See risk management.
Context that changes the odds
| Factor | Improves the setup | Weakens it |
|---|---|---|
| Higher timeframe trend | Pattern agrees with the daily or weekly direction | Pattern fights the larger trend |
| Volume | Expands on the breakout | Breakout happens on thin volume |
| Duration | Formed over many candles | Formed over three or four candles, which is mostly noise |
| Level confluence | Trigger sits at a well tested level | Trigger sits in empty space with no history |
| Market conditions | Trending, orderly market | Choppy range, where nearly every pattern fails |
Other patterns
Head and shouldersInverse head and shouldersDouble topAscending triangleDescending triangleBull flagBear flagCup and handle
Common questions
What is the trigger on a double bottom?
A close above the high between the two lows, which is the resistance that has capped the first bounce. Touching it is not the trigger.
Where does the stop go?
Below the lower of the two bottoms. If price goes back through that, the level buyers were defending has gone and the reason for the trade has gone with it.
Where to go next
All 26 patternsThe full set with diagrams.Risk managementSizing and stops.CandlesticksThe building blocks.
Practice spotting these
We go through live charts together and separate the real setups from the shapes your brain wants to see. That second skill is the harder one.