What Does a Double Bottoms Chart Pattern Mean?
Double bottoms xauusd pattern is a reversal pattern that is formed after an extended downward xauusd trend.
Double bottoms xauusd chart pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak between the 2 troughs.
The buy signal from this double bottoms chart pattern market bottoming out gold signal occurs when the xauusd market breaks-out the neck line to the upside.
In Gold, the double bottom pattern is an early warning gold signal that the bearish Gold trend is about to reverse.
Double Bottoms Pattern is only considered complete/confirmed once the neckline is broken.
In this double bottoms chart patterns formation the neckline is the resistance level for the xauusd price. Once this resistance is broken the xauusd market will move up.
Summary:
- Double bottom xauusd chart pattern forms after an extended move downward - gold downwards trend
- This Double bottoms xauusd chart pattern formation indicates that there will be a reversal in the xauusd market
- We buy when price breaks-out above neck line: as described on the xauusd example illustrated & explained below.
What Does a Double Bottom Pattern Mean?
The double bottom chart pattern look like a W Shape xauusd chart pattern, the best reversal gold signal is where second bottom is higher than the first bottom as shown below.
This means that the reversal gold signal from the double bottom pattern can be confirmed by drawing an upwards gold trend line as shown below. If a trader opens a buy trading signal the stop loss will be placed just below this upwards trend line.
What Does a Double Bottom Chart Pattern Mean? - What Happens to Gold Price Action After a Double Bottoms Chart Pattern in Gold Trading
