What is the success rate of double bottom patterns?

    Quick Answer

    The double bottom pattern has a 66% success rate as a bullish reversal pattern.

    Detailed Explanation

    The double bottom pattern, forming a 'W' shape, has approximately 66% success rate when properly identified. This bullish reversal pattern occurs after a downtrend and signals potential trend change. The two bottoms should be at similar price levels (within 3-4%), and the breakout above the middle peak (neckline) confirms the pattern.

    Key Points

    • 166% success rate for bullish reversals
    • 2Both bottoms should be within 3-4% of each other
    • 3Volume typically lower on second bottom
    • 4Neckline break confirms pattern
    • 5Target = pattern height added to breakout

    Example

    Stock drops to $50, bounces to $60, drops back to $51, then breaks above $60. Target = $70 ($60 + $10 pattern height).

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