In today’s lesson, we are going to demonstrate an example of a chart offering multiple entries upon producing the double bottom. We know the double bottom is one of the strongest bullish reversal patterns. When a chart produces a double bottom, price action traders keep their eyes on the chart to keep going long. Usually, a double top or a double bottom ends up offering multiple entries. Let us now have a look at today’s example of how it offers us multiple entries.
This is an H4 chart. The chart shows that the price heads towards the South with good bearish momentum. It makes a long bearish move too. However, look at the last candle in the chart. It comes out as a bullish inside bar, which is produced at double bottom support. The buyers are to wait for a breakout at the neckline and go long in the pair.
The chart shows that one of the candles breaches through the neckline level. The next candle comes out as a bullish candle. The buyers are to wait for the price to consolidate and produce a bullish reversal candle to go long in the pair.
Upon producing a bearish inside bar, the price produces a bearish candle. The last candle looks very bearish. However, the buyers must keep their eyes on the chart since it may produce a bullish reversal candle anytime as far as double bottom and neckline breakout are concerned.
The chart produces a bullish reversal candle followed by another bullish candle breaching through consolidation resistance. The buyers may trigger a long entry right after the last candle closes by setting stop loss below consolidation support and by setting take profit with 1R.
The price heads towards the North with good bullish momentum. It hits 1R within the next candle. The price consolidates and produces a bullish reversal candle closing above the last swing high. Do you notice anything here? Yes, this is another entry. The buyers may trigger a long entry right after the last candle closes. Let us have a look at the trade setup with two horizontal lines on the chart.
The price heads towards the North again and hits 1R within the next candle. It seems that the buyers are having a feast here. The way it has been going, they may wait for the price to consolidate again and produce another bullish reversal candle to offer them one more entry. In a word, this is a chart that is going to be closely monitored by the buyers until it produces a strong bearish reversal pattern such as a double top or a bearish engulfing candle on the daily chart (this is an H4 chart). Next time when you see a double top or bottom on a chart, keep eyeing on the chart to make full use of that.