🚨 I’ll be live at 2:30 p.m. ET with Alex Reid🚨
We’ll cover a recap of our big weekend swing trades on SLV and QCOM, the market’s push higher following ‘Project Freedom’ news, specific trade setups for NVDA as IV ramps ahead of next week’s earnings and more [tap to join us for Profit Panel]
A lot of traders see a double bottom forming and think it’s an automatic invitation to go long. They see the two lows, they see the bounce, and they jump in before the pattern is even confirmed.
But here’s the truth: A double bottom is just a drawing on a chart until it breaks resistance.
If you’re buying because you see a W shape, you’re gambling on a formation that hasn’t actually triggered yet.
Understanding the Dynamics of Double Bottoms
When a stock hits a bottom, bounces and then comes back down to test that same area, most traders assume the pattern itself is the signal. But the real story is what happens to the traders positioned on the wrong side.
Sellers who leaned into that bounce are betting the stock fails right there.
So when price finally pushes through that level, it flips the whole script. They just smoked all the short sellers.
That’s the spark that can turn a simple pattern into a real move.
And once that momentum starts rolling, the stock finds fuel from shorts covering and buyers piling in.
Why the Breakout Triggers a Move
The level I’m watching is the high of that bounce between the two bottoms. That’s your line in the sand.
If the stock takes out that bounce high, then you’ve got something real. Until then?
It’s just a shape on a chart.
Think about how that formation was built. Sellers pushed the stock down, it tried to rally, then failed at a certain level.
That failure point becomes critical resistance. When price finally closes above it, the trap snaps shut — short sellers get squeezed and momentum runs hard.
So the double bottom by itself? Cool to look at.
But the breakout above the bounce high is the only part that actually matters.
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Geof Smith
Geof Smith Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. Urgent: I’m Starting a New Challenge and I Want You to Tag Along
Would you say no to a unique opportunity that helps you shoot for a $600 payout every Friday at a $5k starting stake?
No?
Then I’ve got something you’d want to see right now.
I’ll be embarking on an entirely new type of trading challenge, and I would like you to tag along with me.
Here, you have no business with what’s going on in the overall market…
Or which stock is surging or dumping…
Or even what the newest decision from Washington is.
All we care about is trading the exact same ticker, using the exact same approach, on the same day each week!
If this sounds great, then I would like to invite you to join me on the next Friday Payday Challenge.
But first, I want to take you through the entire game plan behind these weekly paydays live on Tuesday.
You’ll see how we’ve been able to collect 70 different cash payouts in total, with 14 of them coming in this year alone.
Granted, I can’t make absolute trading guarantees.
But if you’d like to see how we’ve been playing the same unique asset weekly for Friday payout opportunities…
As well as how to get in with me on the very next Friday Payday…
Disclaimer: We develop tools and strategies to the best of our ability, but no one can guarantee the future. There is always a risk of loss when trading. Past performance is not indicative of future results. From 8/6/24 to 5/1/26, the average win rate on live published trade alerts is 88.6%. The average return (winners & losers) was 5.23% over a 3-day hold time.
