Double bottom chart pattern
A double bottom is two lows at about the same price after a fall. Learn the exact rules, what it gets mixed up with, where it fails, and tap the second bottom.
A double bottom is two lows at about the same price, with a sharp rally between them. It shapes a "W", and the rally's high is the neckline (on this site: two swing lows within 1.5% of each other, at least 5 candles apart, a rally of at least 3% between them, and no third low at that level).
Practice: tap the second bottom
How to identify it (the exact rules)
These are the rules this site uses to build and grade every chart. Traders do not all use the same numbers; ours are published so you can check every answer (see the methodology).
- Swing high: a candle whose high is above the highs of the 3 candles before it and not below the highs of the 3 after it, so a tie counts once, at the first candle (swing low: the mirror).
- Double top or bottom: two peaks within 1.5% of each other, at least 5 candles apart, with a 3% trough between (for a double bottom: two swing lows, mirror image).
- A double top's trough is sharp: at most 4 candles in its bottom quarter.
- Exactly two bottoms: a third bottom at the same level makes a flat bottom (a range or a triangle), not a double bottom.
- Price came down from above the trough in the 8 candles before the first bottom.
What it shows
Sellers drive price down to a low, and buyers push back. Price rallies, then sellers try again and reach about the same low, where buyers appear once more. Two stops at one price suggest a floor: enough demand sits around that level to absorb the selling.
The rally high between the two lows is the line to watch. Below it, the shape is just two lows in a decline. Most chart readers wait for a close above it before calling the pattern complete. In the chart above, you tapped the second bottom: the low that tested the first one and held.
The parts of a double bottom
| Part | What it is | Rule on this site |
|---|---|---|
| Approach | The fall into the first bottom | In the 8 candles before it, price traded above the rally's high |
| First bottom | A swing low | Lower than the 3 candles on each side |
| Rally | The bounce between the lows | At least 3% high, and sharp: at most 4 candles in its top quarter |
| Second bottom | The next swing low, 5 or more candles later | Within 1.5% of the first bottom |
| Neckline | The high of the rally | The level traders watch for a close above |
The rules are the exact mirror of the double top: flip a double top chart upside down and you get a double bottom. A version with three lows at the same price is a triple bottom; on this site, a third equal low means the shape is no longer a double bottom.
Most often confused with: the single bounce
The most common mistake is calling a double bottom after the first bounce. After a fall, almost every low is followed by some rally. Until price comes back down and holds near the first low, there is no second bottom and no pattern. The other mix-ups are with shapes that also form at lows. An inverse head and shoulders has three lows, the middle one deeper. A cup has one broad, rounded base, while the rally inside a W is quick and pointed.
What it does not tell you
A double bottom does not mean the decline is over for good. It shows that one floor held twice in a short window. It does not say how high price will go after a break above the rally high. Chart readers often project the distance from the lows to the neckline above the break, the measured move. That is a convention for drawing a reference level, not a forecast. The pattern also cannot tell you whether the fall that came before was caused by something that has not finished.
How reliable is it?
Double bottoms were among the shapes Lo, Mamaysky and Wang (2000) detected automatically on US stocks from 1962 to 1996. They concluded that several of the patterns they studied carried some incremental information about returns, which is a statement about information, not about profits from trading them. We have no reliable success rate to give you. Figures quoted online tend to come from examples chosen because they worked.
Where the idea is proven wrong
The pattern's logic is that the old low is a floor. If price falls clearly below the lower of the two bottoms, the floor broke, and the W becomes one more step in a decline. If price keeps drifting under the rally high without ever closing above it, the floor has held but nothing has turned; a W that never clears its middle peak is still a decline with a pause in it.
Volume
Some guides describe volume picking up on the rally out of the second low. Volume is not part of this exercise: you find the second bottom from the lows of the candles.
Frequently asked questions
Is a double bottom bullish?
It is read as bullish because sellers failed twice at the same price after a fall. Most chart readers treat it as complete only after a candle closes above the high of the rally between the two lows. Before that, the second low can still break, and the decline can continue.
What does a W pattern mean in stocks?
A W pattern is another name for a double bottom: down to a low, up in a rally, down again to about the same low, then up. It describes a floor that held twice. Chart readers usually wait for a close above the middle peak of the W before calling it complete.
Should the second bottom be higher or lower than the first?
Either can happen. This site accepts two lows within 1.5% of each other. A second low that is slightly higher shows sellers reaching less far; one that is slightly lower can still count if it stays within the limit. A second low far below the first means the floor did not hold.
How is a double bottom different from a double top?
They are mirror images. A double top forms after a rise, has two equal peaks, and is usually treated as complete on a close below the dip between them. A double bottom forms after a fall, has two equal lows, and is usually treated as complete on a close above the rally between them.