Double floor

Double floor

A double floor is also a typical trend change pattern, but in this case we seek to buy instead of selling. These formations occur after extensive bearish tendencies, when two valleys or a double floor have been formed.

[caption id="attachment_742" align="aligncenter" width="188"] Double floor[/caption]

You can see in the chart above that after the downward trend, the price formed two valleys or a double floor, because it was not able to go further down that level. Notice how the second low peak was not able to significantly break the first.

This is a sign that the sales pressure is over, and that buyers are about to take control. In this situation, would an order of entry above the resistance above.

[caption id="attachment_743" align="aligncenter" width="257"] Double floor[/caption]

Check this out! The price broke the resistance and made a good move up. Remember that like a double roof, a double floor is also a formation of Japanese candles or graphic pattern of change of trend.

NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.