Double Bottom Pattern: Two Lows, One Target

What it shows

A coloured line through the four swing points (the fall into the first bottom, both bottoms and the bounce), a dotted neckline at the bounce’s price that runs to the breakout candle, a light fill between, the pattern name below the bottoms, and a dotted target line ending in a Target label.

How Pravex works it out

1. The scan looks back 600 candles at most. It first marks turning points: a candle whose high is strictly higher than the previous 5 highs and at least as high as the next 5 is a swing high, and lows work the other way round. Because 5 later candles are needed, every turning point is 5 candles old before it can be used. Two turning points of the same kind in a row are merged into the more extreme of them.
2. Take four alternating swings in a row: a high, a low, a high and a low. The two lows are the bottoms, the middle high is the neckline level, and the first high starts the lead-in leg down.
3. Height is the middle high minus the lower bottom. The bottoms may differ by no more than the Second low match share of the height. The leg from the first high down to the first bottom must cover at least the Lead-in strength share of the height, and the middle high must sit below the first high. Between the bottoms, no low may fall under the lower bottom by more than the Overshoot allowance share of the height.
4. Breakout: the first candle after the second bottom that closes above the neckline (a flat line at the middle high). Target: the neckline plus the height. Failure level: the lower bottom minus the Overshoot allowance; a low under it before a close over the neckline drops the shape.
5. From the breakout on, each later candle is checked: touching the target first makes the status Reached, crossing the failure level first makes it Failed, a candle that does both at once makes it Indefinable, and until then it stays Awaiting.

Settings

Setting	Default	What changing it does
Which patterns to keep	All	Decides which patterns are drawn. With All nothing is hidden. Awaiting and Reached removes Failed and Indefinable patterns, Only Awaiting also removes Reached ones, and Last Awaiting narrows it to the newest pattern that is still Awaiting.
Where targets are drawn	Only Awaiting	Controls the target lines only. Pick All, Only Awaiting, Awaiting and Reached, or None; the pattern lines and fill stay whatever you pick here.
Lead-in strength	50	How strong the move into the pattern must be, as a percent of the pattern’s height. At 50 the leg that leads into it must cover at least half that height. Raise it to demand a clearer prior trend, lower it to accept shallow lead-ins.
Second low match	10	How much lower or higher the second bottom may be than the first, as a percent of the pattern’s height. Raise it to accept a lopsided double bottom.
Overshoot allowance	15	How far a low between the bottoms may dip under the lower bottom, as a percent of the height. It also sets the failure level under the bottoms once the pattern is live.
Show unconfirmed patterns	off	When off, only broken-out patterns are drawn. When on, Pravex also draws shapes still waiting for their breakout, the last leg dotted and a provisional target in place. That final point is not a confirmed swing but the running high or low, so it shifts as new candles print.

How traders read it

A double bottom reads as sellers failing twice at one level; the close over the bounce is the confirmation. The target is the pattern’s height projected up from the neckline.

Work it through with made-up figures: the bottoms sit at 90 and the middle high at 100. The height is 10, so when a candle closes over 100 the target is 110. A stop under the bottoms at about 89 puts 11 of risk against 10 of room to the target, a ratio under one to one.

When it misleads

A double bottom fails most often in a strong downtrend, where the bounce is only a pause and the next candle closes under both lows. The shape is drawn only after the neckline breaks, so part of the move has already happened. Confirmed swings are the only input, but the drawing is not frozen: a more extreme swing of the same kind arriving later replaces the old one, which can reshape or remove the pattern, and a close outside on the forming candle can still slip back before it finishes.

Questions and answers

How level do the two bottoms have to be?

Within the Second low match share of the pattern’s height, 10 by default. With a height of 10, bottoms up to 1 apart pass.

When does Pravex draw a double bottom?

After a candle closes above the neckline, the flat line at the bounce between the bottoms. With unconfirmed patterns shown, double bottoms that have not broken out yet are drawn too.

Where is the double bottom target?

The pattern’s height above the neckline, counted from the neckline price, not from the breakout candle’s close.

Does the second bottom have to be lower than the first?

No. Either one may be lower, as long as the two sit within the Second low match share of the height of each other.

Related: Double Top Chart Pattern, Triple Bottom Chart Pattern, Inverted Head and Shoulders Chart Pattern, All Chart Patterns, every indicator.