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Double Bottom Scan ?

fish4foodfish4food ✭
edited March 2015 in Scanning
How do I write a scan for double bottoms on a daily chart? Double bottoms should be a week to a month apart.


Edit Gord: I moved your question over to the main forum Discussion / Question page so other users will see it. The Activity page is just a page which shows the sign up of new members and badges, no one really monitors messages posted there. Best to put them in the appropriate category on the main page.

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    markdmarkd mod
    edited March 2015
    Since double bottoms occur in so many different circumstances, it would be difficult to write one scan that reliably catches every double bottom, even within the limits you specify. But you could start with a price channel approach. A double bottom will often have a flat lower price channel between the two lows. The trick is to find the right time frame for the price channel.

    A one month price channel would be about 21 days (maybe a little longer). You would want today's low to cross below yesterday's value for the lower price channel, or to be within some per cent of it. You would want yesterday's lower channel to be equal to the lower price channel value some number of days back - nearly the length of the channel time frame. Then you would have to decide how much of a rally you would want in between to consider it a real double bottom. So you might choose the max close in the price channel time frame (e.g. max(21,close)) to be greater than the max mid channel value. Lots of choices to make, some probably better than others, but most likely none perfect.

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