Double Bottom Set up – GBP: NZD

Impressed by the interest in Michael’s Mystery Chart, I initially thought of making this set up a mystery too.

I could become the Crocodile Dundee of the CMC Blog – “That’s not a mystery chart – THAT’S A MYSTERY CHART”.

While as a mystery chart GBP: NZD may be a pretty annoying “degree of difficulty 9.99”, it does have possibilities as a setup so I thought readers may be interested in a “fully disclosed” post.

Daily Chart

The 2 recent trend troughs in GBP: NZD are close enough to be a potential double bottom. The 2nd low looks like that typical “retest” behaviour which indicates that the market has gone from a clear downtrend to a more indecisive phase. Previously new buying only came in at distinctly lower lows. Now buyers are coming back at about the same level as before.

The double bottom would be completed by a confirmed break above the peak between the 2 lows.

At the moment price is baulking at that level. If it falls away from here, this situation could end up developing into some other kind of chart pattern e.g. a triple bottom.

GBP NZD CFD. Source CMC Tracker

GBP NZD CFD. Source CMC Tracker



There is resistance from an old low just above this double bottom peak. On that basis one approach to an entry strategy would be to wait for price to break past this resistance as well before assuming a new uptrend was clearly under way. Stop entry buy orders can be a good way of implementing this kind of strategy.

Profit objective

The approach shown on this chart is to measure the height of the double bottom pattern and project this from the peak between the 2 lows. I’ve used Tracker’s Fibonacci price tool to do this. It’s the 100% measure on the chart

Stop Loss

To begin with, this has been set behind a minor support level back in the body of the double bottom pattern. If an uptrend develops, it can also pay to trail this up behind any new failure points that emerge.

Tracker Order Ticket

The order ticket below shows how this type of strategy can be put into place using Tracker.

As usual, I have used a boundary on the stop entry order to avoid being caught by a gapping market

CMC Tracker Order Ticket

CMC Tracker Order Ticket

About Ric Spooner

Over 30 years market experience - professional trader, broker, director
This entry was posted in Forex, Market, Trading and tagged , , , , , , . Bookmark the permalink.

2 Responses to Double Bottom Set up – GBP: NZD

  1. @JackieTheTrader says:

    I’ve tweeted that short term, there is a triangle break to the upside towards 1.8550. Medium term, I’m looking for an upside target near 2.20 (despite being in a multi-year downtrend). I’m not yet confident about 2.20 as we don’t yet have a wave structure to suggest the bottom will hold. I’ll let you know if I see a wave structure suggesting the bottom may hold, but right now, 2.20 is my upside target before we head to new lows below 1.80.

    • Ric Spooner says:

      Hi Jackie,

      Thanks for that. If you’ve got time to keep us up to date with how you are seeing things as the structure evolves that would be great


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