By Islam BarakaDefinitions
In plain terms
It checks whether two lows form distinct tests around a common level, then waits for a causal upside break.
Technical
The selected close-only contract mirrors Double Top with normalized spread <= 0.025, retracement >= 0.05, prior decline >= 0.03, strict pivots, and finite expiry.
Scope
A detected double bottom is a geometric event contract, not a guaranteed rally or trade.
Formula
spread=(max(p1,p2)-min(p1,p2))/mean(p1,p2); retracement=(peak-mean(p1,p2))/mean(p1,p2); confirm close above necklines=\frac{\max p-\min p}{\bar p},\quad r=\frac{v-\bar p}{\bar p},\quad C_t>N_t| Symbol | Meaning | Unit |
|---|---|---|
p1,p2 | comparable lows | price |
v | intervening peak | price |
Output unit: fractions and price
Examples
- A reviewer computes Double Bottom on a deterministic close fixture and checks pivot timing, threshold equality, neckline behavior, and rejection diagnostics before publication.
Common misconceptions
- A detected double bottom is a geometric event contract, not a guaranteed rally or trade.
Concept relationships
Related
Required by
- Comparable Bottom Level
- Triple Bottom
- Three-Way Comparable Lows
- Triple Bottom Intervening Peaks
- Triple Bottom Retracement Minimum
- Triple Bottom Neckline Projection
- Triple Bottom Confirmation Break
- Triple Bottom Candidate Availability
- Triple Bottom Pivot Sequence
- Triple-Bottom versus Double-Bottom Distinction
- Triple Bottom Rejection Reason
- Inverse Head and Shoulders
- Inverse Shoulder Comparability
- Inverse Head Dominance
- Inverse H&S Pivot Sequence
- Inverse H&S Peak Neckline Anchors
- Inverse H&S Neckline Projection
- Inverse H&S Confirmation Break
- Inverse H&S Candidate Availability
- Inverse H&S Prior Decline Requirement
- Inverse H&S versus Triple Bottom
Where this concept is used
Evidence and governance
- Members' Guide to 2021 Refresher Readings CFA Institute · first party methodology
Supports: preferred label, short definition, technical definition, formula
Limits: The curriculum does not prescribe this package's pivot window, numeric thresholds, causal state machine, or performance claim.
- Foundations of Technical Analysis: Computational Algorithms, Statistical Inference, and Empirical Implementation Lo, Mamaysky, and Wang · first party technical publication
Supports: preferred label, short definition, technical definition, formula
Limits: The paper's smoothing, sample, and empirical design are not copied into this package and do not validate its thresholds.
- Pine Script repainting concepts TradingView · official platform documentation
Supports: preferred label, short definition, technical definition, formula
Limits: Platform display behavior does not establish financial usefulness or predictive value.
- scipy.signal.find_peaks SciPy · first party technical publication
Supports: preferred label, short definition, technical definition, formula
Limits: This retrospective signal function is not itself a causal OHLC pivot detector.
- Pine Script pivot techniques TradingView · official platform documentation
Supports: preferred label, short definition, technical definition, formula
Limits: The package freezes its own equality, separation, and OHLC policies rather than claiming one universal pivot definition.
- Zig Zag indicator QuantConnect · official platform documentation
Supports: preferred label, short definition, technical definition, formula
Limits: This package selects a close-only percentage-reversal variant and documents the difference.
- LEAN ZigZag source QuantConnect · first party technical publication
Supports: preferred label, short definition, technical definition, formula
Limits: A maintained implementation is evidence for one convention, not a universal market rule.
- Reviewed by
- fintech-builder-batch-012
- Last reviewed
- 2026-08-10
- Next review
- 2027-08-10
- Record status
- evidence reviewed
This record is evidence-reviewed and readable, but not yet promoted to published — it is served noindex,follow and excluded from the sitemap.