I’ve finally coded a Double Bottom detecting algorithm and have added it to BTFD Bot. So is it worth looking for this pattern or is it an overrated trading technical analysis signal?

00: 00 – Double Bottom Pattern
01: 12 – Backtest Results (Japan Equities)
02: 42 – Backtest Results (US Equities)
07: 00 – BTFD Bot Backtester Results
09: 04 – Improving the Win Rate
09: 55 – Issues with Double Bottoms
12: 00 – Summary

Various researchers have claimed a 68 – 78% win rate for the double bottom pattern:

Summary of Double Bottom backtest results: https://www.quantifiedstrategies.com/double-bottom-strategy/
Financial Wisdom’s best chart patterns: https://www.youtube.com/watch?v=TmRgEQOVtsw

This pattern is significantly more complex compared to other indicators such as 52 week lows. There is a major subjective aspect to 52 week lows. Some traders claim that the distance between the two lows makes a difference, as does the volume at the second low. As far as I have been able to tell from my own data, none of this makes a significant difference. It has also proven significantly more difficult to optimise double bottoms. This may be because they form over an extended time period, so other factor including macro economic indicators are less relevant when it comes to assessing a double bottom.