Rounding Bottom (Reversal)

Ultimately, the buyers win and the price breaks through the upper trendline, indicating that the uptrend will resume.

In turn, the pattern can offer high reward-to-risk, or low reward-to-risk. It has converging trendlines, just like a wedge pattern, but the slope is neither pointing up or down. 

Buying as the price starts to transition higher, and placing a stop loss below a recent swing low provides high potential reward for the risk, potentially upwards of 4: During uptrend, the price may pullback and form a rounded bottom pattern before starting its ascent again.

Rounding Top: Identification Guidelines 

Martha Stokes: Recognizing A Rounding Top Pattern Martha Stokes | August 06, at PM. MMM Stock Chart Shows A Rounding Top Developing. Topping patterns are critical to recognize prior to the stock turning down, especially in the modern market structure, where HFT algos can trigger sudden price collapses within seconds of the .

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BREAKING DOWN 'Rounding Top' 

DEFINITION of 'Rounding Top' A rounding top is a chart pattern used in technical analysis which is identified by price movements that, when graphed, form the shape of an upside down "U". A rounding top may form at the end of an extended upward trend and will often indicate a reversal in the long-term price movement.

The above figure shows an example of a rounding top chart pattern. Price bottoms at the start, A, climbs to the top at B, and then rounds down to C. In this example, when price rises above the 32% retrace buy point, it signals a purchase. Rounded Top Chart Pattern Implication A Rounded Bottom is considered a bullish signal, indicating a possible reversal of the current downtrend to a new uptrend. 

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Short-Term Patterns

Rounded top and bottom The rounded top and bottom are reversal patterns designed to catch the end of a trend and signal a potential reversal point on a price chart. The rounded top pattern appears as an inverted 'U' shape and is often referred to as an ‘inverse saucer’ in some technical analysis books. Trading stocks education - Trading tactics & examples Rounding Top Bearish Reversal Rounding Top is a rally to a new high on strong volume, several weeks of light trade with limited upside progress, several more weeks of light trade with a decided downward bias, followed by a sharp move lower on strong volume.

The rounding bottom pattern, also known as the "saucer" or "bowl" is a longer term pattern that is usually identified using a weekly chart. Typically (62% of the time), there is an uptrend prior to the rounding bottom (Bulkowski, ). Rounded top and bottom Advanced chart patterns. Join Tradimo's Premium Club And Choose a Membership Right For You. 1,+ hours of videos, quizzes & projects Rounded top and bottom. 7 minutes. Enrol into this course now to save your progress, test your knowledge and get uninterrupted, full access.

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