In this video, you will learn how to identify and trade the double bottom chart pattern. You look for this pattern at the end of a downtrend, so that you can take a long position.
What is the psychology behind this pattern? As the downtrend slows down, it finds support attracting buyers. They manage to push price away from support. As the trend is still intact, sellers come at higher level, pushing the price down to support. Once again buyers take control, push the price up, form a "W" like pattern. Look for the break of the neckline for the completion of this pattern.
You can wait for the price to break above the neckline and go long here. Place your stop-loss below the support. Measure the height from support to neckline and use this height from neckline to find the take-profit level.
A conservative way is to wait for price to retest, after the break of the neckline. The broken resistance now becomes support. Now, it is time to long. Your stop-loss is small and take-profit is the same as above.