forex signals from Double Bottoms Adam and Adam

Double Bottoms, Adam & Adam and how to place trading signals

Double bottom pattern with narrow or spike bottoms. Breakout is upward

Downward price trend. Look for price to be tending downward into the
pattern. A study documented in my book, Trading Classic Chart Patterns (Wiley
2002), suggests that performance improves for patterns with trends leading to the pattern less than 6 months long. Most of the time (58%), a short-term

(0 to 3 months) downtrend precedes the pattern.
Bottom shape. The shape of each bottom should appear similar. That
means both should look narrow, not one wide and one narrow, perhaps with a long, downward price spike or tail. To gauge the width, look at the top of the bottom.
I know that sounds confusing, but the top end of the spike will be wider
than the base. (Eve bottoms will appear more rounded and wider than will their Adam counterparts.)
Confirmation price. A twin bottom pattern is not a valid double bottom
until price closes above the high between the two bottoms. Always wait for confirmation before taking a position in a stock because price continues down 64% of the time—and that is in a bull market, too!

Measure rule for your signals
Compute the height from the highest high between
the two bottoms to the lower of the two bottoms then
add the difference to the highest high. The result is the target price.

tips for trading signals

Wait for breakout Always wait for confirmation (a close above the highest high).
Trade with market trend To improve your odds, trade this bullish pattern in a bull market.
Check others in the industry Are other stocks in the same industry showing bottoming patterns?
Throwback Initiate or add to your position once price starts
rebounding after a throwback.
Select patterns in a bull market. They have the largest average rise
Throwbacks hurt performance, so avoid patterns with overhead resistance
Select tall patterns. Avoid ones that are both short and wide

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