Rounding Bottom
BullishReversalBeginnerA slow, smooth bowl. Selling fades, buying creeps back, no drama.
Verdict: SkipBitcoin 4H: 35 trades, won 60%, avg trade +2.2% vs random day +3.6%. Backtest
Price tops out at a high and starts to drift lower.
step 1/7
Trade rules
| Direction | Long (buy) |
|---|---|
| Entry | The first candle CLOSE back above the left rim, 25 to 180 daily candles later (30 to 260 on Bitcoin 4H), after a bowl 12-45% deep with its low in the middle half of that time. |
| Cancelled if | No signal if the bowl is V-shaped (under 20% of the candles in its bottom third), does not fit a smooth curve, or comes back to the rim too fast or too slow. |
| Target | Bowl depth, projected from the breakout |
3 common mistakes
- Calling a V-shaped crash and rebound a rounding bottom.
- Buying in the middle of the bowl instead of at the rim break.
- Expecting a quick trade: these take months on a daily chart.
Backtest
same rules every time · equal size · no fees · method| Market | Trades | Won | Avg trade | Random day |
|---|---|---|---|---|
| Bitcoin · 4H · 2017-2026 | 35 | 60% | +2.20% | +3.57% |
| US large caps (50) · 1D · 2016-2026 | 413 | 63% | +5.15% | +5.68% |
Verdict: SkipIt made money, but less than buying on a random day.
pattern +77%random +125%
pattern +2127%random +2346%