Trading Double Bottom Pattern

Trading the Double Bottom Pattern

The example above illustrates a "Double bottom" pattern formation from the Dow Emini futures (YM) chart. YM made a double bottom from June, 2006 to August, 2006 at the 10,800 level. The "Double bottom" pattern is relatively easy to trade. A "long" trade was triggered at the breakout of the swing high (at level "A" 11,500).

1. Enter a "long" trade above the high of the breakout bar at level "A" at 11,500.

2. Place a "stop" order at the middle of the channel (trading below may be "triple bottom").

3. Target the depth of the "double bottom" pattern (600 points) above the trade entry.

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