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# How to trade double bottom pattern forex?

The double bottom pattern is a popular chart pattern used by forex traders to signal a potential bullish reversal in a downtrend. It is a pattern that looks like the letter “W” and is formed when the price of an asset reaches a low point twice, but fails to break below this level. When a double bottom pattern appears, traders can use it as a signal to enter a long position and take advantage of the potential price increase.

### Identifying the Double Bottom Pattern

The first step in trading the double bottom pattern is to identify it on a chart. The pattern consists of two lows that are roughly equal, separated by a peak in the middle. The pattern is complete when the price breaks above the peak, confirming the bullish reversal.

It is important to note that the double bottom pattern should only be traded in a downtrend. If the pattern appears in an uptrend, it could indicate a potential trend reversal, but it is not a reliable signal.

### Entering a Long Position

Once the double bottom pattern is identified, traders can enter a long position. The entry point is when the price breaks above the peak of the pattern. This confirms the bullish reversal and signals that the price is likely to continue to rise.

Traders can set a stop loss below the second low of the pattern. This is the level at which the pattern would be invalidated, and the downtrend would likely continue. Setting a stop loss helps manage risk and limit potential losses.

### Setting a Take Profit Target

Traders can set a take profit target based on the distance between the bottom of the pattern and the peak. This distance is known as the “measured move” and can be used to estimate how far the price is likely to rise after breaking above the peak.

To calculate the measured move, traders can subtract the low of the pattern from the peak and add this distance to the breakout point. For example, if the low of the pattern is at \$100, the peak is at \$110, and the breakout point is at \$105, the measured move would be \$15 (\$110 – \$100 = \$10, \$105 + \$10 = \$115).

Traders can set a take profit target at the measured move level or slightly below it to ensure they capture the majority of the potential price increase.