Subscribe to RSS feeds Bulkowski Blog via RSS

Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

Support this site! Clicking the links (below) takes you to Amazon.com. If you buy ANYTHING, they pay for the referral.

Picture of the Tears for Bumper.
Kindle
Picture of the head's law.
Kindle
Paperback
Nook
Chart Patterns: After the Buy
Getting Started in Chart Patterns, Second Edition book.
Trading Basics: Evolution of a Trader book.
Fundamental Analysis and Position Trading: Evolution of a Trader book.
Swing and Day Trading: Evolution of a Trader book.
Visual Guide to Chart Patterns book.
Encyclopedia of Chart Patterns 2nd Edition book.

Bulkowski's Double Bottom Types

Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 04/27/2017
20,981 6.24 0.0%
9,194 26.25 0.3%
708 2.41 0.3%
6,049 23.71 0.4%
2,389 1.32 0.1%
YTD
6.2%
1.7%
7.3%
12.4%
6.7%
Tom's Targets    Overview: 04/17/2017
20,100 or 21,150 by 05/01/2017
8,500 or 9,500 by 05/01/2017
725 or 685 by 05/01/2017
6,150 or 5,900 by 05/15/2017
2,275 or 2,425 by 05/01/2017
Mutt Winners: None YTD

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

This article discusses the various types of double bottom chart patterns. For more information about them, buy a copy of my book, Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., shown on the right. Each variation has a chapter to itself.

A double bottom pattern occurs when price drops to a low and forms a valley, rises, and then forms a second valley near or at the same price as the first one. The shape of the double bottom can vary from pattern to pattern.

The chart shows the four types of double bottoms. Adam bottoms are narrow, often one-day price spikes. Eve bottoms are wider and more rounded looking. Eve bottoms may also contain price spikes, but they tend to be shorter and more numerous.

Perhaps the best way to tell apart the various types of double bottoms is to ask if the two bottoms look similar or different. Similar means Adam & Adam or Eve & Eve. Different means Adam & Eve or Eve & Adam. Once you've figured that out, look at the height of the bottom. Adam bottoms tend to remain slender over the height whereas Eve bottoms tend to widen out.

Picture of the four types of double bottoms

The figure shows a few statistics to help gauge performance. All four varieties perform similarly. The failure rate is a measure of how often price fails to rise at least 5% above the breakout price. The breakout price is the highest high between the two bottoms. Thus, the "break even failure rate," which I show, is an easy benchmark and that's why the numbers are so small, 4% or 5%.

The average rise my cause your jaw to drop. It's a measure of the average rise from the breakout price to the ultimate high. The ultimate high is the highest high before price reverses trend. And that trend reversal means a drop of at least 20%. The numbers are based on hundreds of perfect trades, so your chance of duplicating such a rise on a consistent basis is probably zero.

The Eve & Eve double bottom gives a trader the most bang for the buck. It has the smallest failure rate and the highest average rise. It's the best choice if you're going to trade double bottoms.

-- Thomas Bulkowski

Top of page   More  

See Also

Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Xerox never comes up with anything original.