How Do You Analyze Double Bottoms Chart Pattern?

Trading XAUUSD Interpret Double Bottoms Chart Pattern

To learn how to interpret and trade using double bottoms chart pattern a gold trader will first of all need to learn double bottoms chart pattern technical analysis explained below.

Double Bottoms Trading Pattern

Double bottoms xauusd chart pattern is a reversal chart pattern that forms after an extended downwards xauusd trend.

Double bottoms xauusd chart pattern is made up of two consecutive xauusd price troughs that are roughly equal - with a moderate peak in between the two xauusd price troughs.

Double bottoms xauusd chart pattern is considered to be complete once xauusd price makes the second low and then penetrates the highest xauusd price point between the xauusd price lows - this highest xauusd price point between the gold troughs is called the neckline.

Buy gold signal from double bottoms chart pattern is generated when the price breaks above the neckline to the upside.

In gold trading the double bottoms chart pattern is an early warning gold signal that the downward gold trend might reverse.

Double bottoms xauusd chart pattern is only considered confirmed once the neckline is broken - in double bottoms chart pattern the neckline is the resistance level for the xauusd price. Once this resistance level is broken by the xauusd price will then move up.

Summary: Trading Gold Interpret Double Bottoms Chart Pattern?

• Double bottoms xauusd chart pattern is formed after an extended gold downward trend move
• Double bottoms xauusd chart pattern signals that there will be a reversal in the gold trend
• Gold traders will buy when the price breaks above the neckline: as explained on the double bottoms chart pattern example illustrated and explained below.

How to Interpret Double Bottoms Chart Pattern?

The double bottoms chart pattern look like a W Shape pattern, the best double bottoms chart pattern reversal gold signal is where the second xauusd price bottom is higher than the first xauusd price bottom as shown on the xauusd trading example illustrated and explained below.

This means that the reversal gold signal from the double bottoms chart pattern can be confirmed by drawing an upward gold trend line as shown on the double bottoms chart pattern example illustrated and explained below. If a gold trader opens a buy gold trade the stop loss order will be placed just below this upward trend line.

Interpret Double Bottoms Chart Pattern

How Do You Analyze Double Bottoms Chart Pattern