Rounding Bottom
DowntrendConfirmation
Break above the resistance or prior swing high that caps the base.Invalidation
Failure back below the emerging right-side support structure.
A gradual transition from decline to accumulation to advance, forming a broad U-shape.
Control shifts gradually from sellers to buyers rather than through a single sharp reversal.
Often dries up near the base and rises on the right side.
The setup forms near a meaningful support, resistance or trend transition.
Defining swing points are visible without forcing the label.
Volume, volatility or relative strength supports the resolution.
| Aggressive | Conservative | |
|---|---|---|
| Trigger | Early boundary resolution | Close plus acceptance or retest |
| Advantage | Better potential entry | More confirmation |
| Trade-off | Higher false-break risk | May enter later or miss the move |
Measured targets are planning references, not forecasts. Position size should be derived from defined account risk and the actual invalidation distance.
A pattern can satisfy the visual outline yet fail because it forms in the wrong context, lacks sufficient touch points, breaks on weak participation or immediately returns inside the structure. A failed setup is information, not an exception to ignore.
Use alternative interpretations to reduce confirmation bias. Similar patterns can imply different behaviour depending on prior trend, boundary slope and confirmation trigger.