When trading the hard right edge of the screen, we’ll occasionally come across what some people regard as a double bottom. I was under the impression that it’s improper (or at least not technically correct) to label such things as double bottoms until they’re confirmed, and I say this despite the common definitions of the term “double bottom” that we may happen upon when doing a quick internet search.
I was under the impression that such bottoms aren’t double bottoms but instead equal bottoms. In other words, the correct term to use when reading the hard right edge of the screen is “equal bottom”—when we see them. It’s not until later after confirmation that we look back and see whether it was or wasn’t a ‘true’ double bottom.
Basically, and according to my understanding, the term “equal bottom” doesn’t imply knowledge whereas the term “double bottom” does. The knowledge I’m talking about is that of price action. The price either has or hasn’t touched or passed through the previous cycle high (when going long). Only the benefit of hindsight should lead us to refer to an equal bottom as a double bottom—if my understanding is correct.
There can be a series of broken equal bottoms (sometimes improperly, I believe, referred to as double bottoms) until we finally reach a genuine double bottom. After all, if a double bottom is a reversal pattern, then referring to a bunch of failed equal bottoms as double bottoms seems to me to be improper. I could be misguided on that notion.
To put it another way, when trading, we know we’re looking at an equal bottom when we see it, but we can’t be sure it’s a double bottom until after the fact.
This may seem like semantics, but there is genuine distinction to be made and communicated with others whether we use those terms or not. I’ve been thinking about possible counterarguments, and I can’t rightly say that my views are solidified, but I thought I’d share my understanding (or perhaps misunderstanding) with others to see if they had any views on the subject—other than simple repeated references to definitions.