Rounding Top / Rounding Bottom
Last updated
Last updated
A Rounding Top is a slow, dome-shaped pattern where price inches higher, then curves downward over time.
A Rounding Bottom is the mirror image. Price gently declines, flattens, and then curves up again.
Gradual Curve. No sharp pivots, just a smooth arc over many candles.
Longer Timeframe. These patterns often take longer to form than triangles or flags.
Volume. Can dip in the middle of the pattern, then pick up near the breakout.
Entry. In a Rounding Top, a break below the final support can confirm a bearish move. In a Rounding Bottom, watch for a push above the last resistance.
Stop. Many place stops near the highest point for a Rounding Top short or near the lowest point for a Rounding Bottom long.
Target. Measure the depth of the curve and use that as a guideline for potential profit.
Patience is key. These patterns usually take a while.
Confirm with other signals, like moving averages or momentum indicators.
Avoid forcing the shape if price action is erratic. Look for a clear, smooth arc.
Search your charts for a gentle, dome-shaped top or bowl-shaped bottom spanning many candles. Mark the highest or lowest curve points. Pretend to enter on a break of the final support (for tops) or resistance (for bottoms). Place stops near the peak or trough. Advance the chart in your backtest to see if price moves in line with the pattern. Compare these trades on various markets to see which ones hold up best.
