#4 of 10 Chart Patterns Every Trader Needs to Know - Rounding Bottom
A rounding bottom chart pattern can signify a continuation or a reversal. For instance, during an uptrend, an asset’s price may fall back slightly before rising once more. This would be a bullish continuation.
An example of a bullish reversal rounding bottom – shown below – would be if an asset’s price was in a downward trend and a rounding bottom formed before the trend reversed and entered a bullish uptrend.
Rounding Bottom Chart Pattern
Traders will seek to capitalize on this pattern by buying halfway around the bottom, at the low point, and capitalizing on the continuation once it breaks above a level of resistance.
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