a glimpse into the future

I was asked:

"how do I identify a double bottom on a 60 minutes time frame in real time?"

my response was:

" A double bottom is in play when there are two lows a minimum of 2 hours apart= 3 bars but ideally more like 4 bars and longer

A LOD (low of the day) being revisited

And yet of course trading is never easy and even though the answer is correct it does not mean that to execute such a double bottom is easy.

let me explain the steps of what is all necessary to be able to follow something seemingly that easy and yet so hard with a bit more ease

1. static versus dynamic charts:

waxing wisely after the fact about a chart, when the chart isn't in motion is an easy job

static charts provide much more ease to find ones truth than dynamic ones

a comparison between hitting a target that's standing still versus a target that is moving comes to mind

dynamic charts do not only have all oscillator and indicator and price and price formations and and and and consistently in motion providing much more data but worse in execution mode a stop watch is running down and tension arises to evaluate this data to find the exact perfect time on when to press the button

this data overload can be reduced by Absolute clarity of what and where we look and what defines an entry or exit

in short it requires rules

data reduction also comes from prep=the daily call

with the daily call cutting using tools like which direction to trade in and "what not to do" by a large margin more headroom is won for the upcoming "battles"

devil of course is always in the details so let me mention some of those:

1 four bars or more are desired since double bottoms become more meaningful the wider apart they are

and this leads to multiple dilemmas:

one of them time versus price

time being the most complex = hence working with clarity of liquidity and time of day and the various time nodes of inter market relationships like exchange openings and closes, announced and un-announced news data and so forth

again a set of rules can help

we for example do only qualify double bottoms within the new sessions, meaning both bars need to be within a trading session with rare exceptions of previous days LODs and alike

another helper is the way price moves-without and action reaction principle beginners should not take a trade

and here we are at the next phenomenon-price

a double bottom can of course be a real double bottom

a inverse dynamic one

or a dynamic one

in other words

the second bottom can be identical in price level

can not quite reach the previous lows

or price undercuts the previous low to right after that bounce to higher levels

this dilemma is in classical TA poorly solved by trading wide stops and confirmed signals

and again it is rules that stabilize the executing trader and that brings us to the true answer on how to trade a 60 minute time frame double bottom:

"That depends on the trader"

what's clear is that rules bring one closer to success in this dilemma(and many others)

where it gets fishy is in defining those rules

let me explain

if you have a personality of FOMO (fear of missing out), you will have a tendency to always be in early

due to that pressure of fearing not to be in the trade at all you will succumb to that pressure emotionally and wont be able to wait for price reaching exact previous prices LOWs-let alone an overshoot

This personality type will struggle with too large stops and reentry rules since a dynamic double bottom already might exhaust three entries

I will not go here into detail about all the various rules and solutions to different personality types but wanted to show that a simple questions are never simple and that seemingly simple questions in trading can have very complex answers.