The Double Bottom Pattern: Reading Two Failed Declines
The mirror of the double top: two rejected declines, a neckline above them, and the context that separates a base from a pause.
A double bottom describes two attempts to push below the same area, both rejected, separated by a bounce. As a description of demand arriving twice at a similar price, it is the mirror image of the double top — but its typical behaviour is not simply the double top inverted.
This guide covers the structure, the neckline, measurement, invalidation, and the context checks that tell you whether you are looking at a base or a pause inside a decline.
Structure of the pattern
Four points define the shape: a low, a bounce high, a second low near the first, and a move back toward the bounce high. The bounce high becomes the neckline, and a close above it is the conventional confirmation.
Time between the two lows matters. Bases that take many periods to form describe a slow transfer of supply to demand; two lows within a few candles describe a short-term liquidity event and usually behave differently.
Why the second low behaves differently
Second lows frequently undercut the first slightly before recovering. Traders who require an exact match miss many valid structures, while traders who accept any nearby low accept many invalid ones. A tolerance band — a small percentage of recent range — makes the rule explicit.
Recording whether the second low undercut or held is one of the more useful fields in a pattern journal.
Measurement and targets
The conventional projection takes the distance from the lows to the neckline and adds it above the neckline. As with any measured move, it is a planning reference. Structural levels above — prior swing highs, range boundaries, higher-timeframe resistance — usually matter more.
Invalidation and context
A close below both lows invalidates the reading. A break above the neckline followed by an immediate return inside the range is a false break, and worth logging as its own category.
The context check is simple: what is the higher-timeframe condition, and is this level significant there? A double bottom at a long-standing higher-timeframe level is a different observation from the same shape in the middle of nowhere.