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Price structure
When do two lows become a double bottom that can be traded?
Double bottom and double top breakout · Double bottom and double top
What it bets
Two similar lows have held, and once the high of the bounce between them breaks, the structure of the decline is over.
How the rule is written
A double bottom is two lows inside a tolerance written in advance, with a high between them. The entry is the break of that high, not the moment the second low appears. The stop often sits under both lows. A double top reverses that. A single low, or two lows that sit far apart, is not a double bottom.
When it fails
If the second low nicks through the first, the pattern is negated. If the rule still treats that nick as close enough, the backtest counts failures as successes.
Do not confuse it with
A 2B is a new extreme that fails at once. A double bottom is two tests that both hold, followed by a break of the neckline between them. One trades the failure. The other trades after the level has held.