Find double bottoms and double tops as they complete

Stocks that tested a level twice and held. Trade Ideas requires real time and volume between the two lows, or highs, so two touches a minute apart do not count.

Many traders read a double bottom as support and a double top as resistance.

The help definition is short: two lows at about the same price, with significant time and volume between them. The time and volume part matters. Two touches a few minutes apart on light trading do not count.

Once the second low is in place, the alert fires with both prices, so you can see how close they came. The double top alert does the same with two highs.

An optional filter sets how many trading hours the pattern took, so you can choose intraday patterns or ones that span days.

The alerts run on intraday turning points, so they find intraday double bottoms during the session as well as larger ones. Check the size of the pattern on the chart before acting.

1. In TI Pro, open a Streaming Alerts window with both alerts.
2. Add Relative Volume (RV), Price and Dollar Volume.
3. Optional: add Position in Range (1 year) (RY) to see where the pattern sits in the 52-week range.
4. Save and turn on sound.

Break of the middle. Many wait for price to clear the high between the two lows.

Stops. Just under the lows for a double bottom.

Context. A double bottom near a 52-week low reads differently from one mid-range.

1. Price drops to a low.
2. It bounces to a high in the middle.
3. It drops again to about the same low.
4. It turns up. Many traders wait for a break above the middle high.

The mirror image: two highs near the same price with a dip between them. A break below the dip is the signal many traders wait for.

The two lows do not need to match to the penny. Trade Ideas allows a small difference and requires real time and volume between them.

A third test of the same low is a triple bottom. The alert can fire on two or more lows at about the same price.

See the support and resistance scanner for level breaks and the head and shoulders scanner.

Example numbers, not a real trade

1. A stock drops to $24.10 in the first hour and bounces.
2. It rallies to $24.60, then sells off again.
3. It holds near $24.10 a second time, with real time and volume since the first low. GDBOT fires.
4. A trader using this setup might wait for a push back over $24.60 and put the stop just under the lows.

A double bottom at a level that matters reads stronger. Pair GDBOT with Crossed Below Support (CBS) on the same window to see whether support held or broke, or with 5 Minute Green Bar Reversal (GBR5) for a reversal candle on the second low.

The double bottom and double top alerts have an optional filter for how many trading hours the pattern took. It counts hours the market was open, so a pattern from noon yesterday to noon today counts as about 6.5 hours, not 24. Short settings find intraday patterns; longer ones find patterns over days.

1. A stock rallies to a high and pulls back.
2. It rallies again to about the same high and stalls.
3. Double Top (GDTOP) fires with the prices of both highs.
4. The trigger many traders wait for is a break below the low between the two highs.

The help definition calls for significant time and volume between the two lows. That is what separates a real retest from two prints a few minutes apart. Lighter volume on the second low than the first is a sign sellers are running out.

The classic target is the height of the pattern, from the lows to the high between them, added to the breakout point. Many traders take part of the position off before it.

Example numbers, not a real trade

1. Two lows at $18.00. The high between them is $19.20.
2. The break over $19.20 is the trigger.
3. Height $1.20, so the target is about $20.40.
4. Stop just under the lows, around $17.90.

Double bottoms often sit inside larger ranges. Rectangle Bottom (GRBOT) fires when a stock has turned at about the same high and low at least five times and the last turn was a low. When both fire on the same stock, the range has a clear floor.

Double bottom window

A double bottom in a single stock while the whole market is falling is fighting the current. S&P Change Today (SpyD) and NASDAQ Change Today (QqqqD) show how the S&P and Nasdaq are doing today. Some traders only take double bottoms when the index is flat or green, and double tops when it is flat or red.

If the second low undercuts the first by a few cents and then snaps back, some traders like it more: it shook out the stops under the first low. If the second low breaks well below the first, it is not a double bottom any more, it is a new low.

Crossed Below Support (CBS) on the same window tells you when price broke support, which helps you tell the two apart.

For swing trades, run the alert with a long hours setting so it only shows patterns over several days. Add Change From 200 Day SMA (%) (MA200P) near zero to find double bottoms that formed right at the 200 day average, a level many investors watch.

There is no separate triple bottom alert. A third test of the same low often shows up in the rectangle bottom alert instead, since the stock has turned at about the same low several times.

A double bottom can turn into a triple bottom, or break down.

Test your rules in a simulated account first.

• Buying the second low before it holds.
• Calling any two lows a double bottom, without time and volume between them.
• Setting the stop at the exact low, where many other stops sit.
• Ignoring a pattern that formed on very light volume.