1Downtrend
The market shows a clear downward trend before the setup.
THE CONTEXTBottom Reversal
A downtrend stalls into a trading range. Price fakes a breakdown below it, then snaps back and closes above the range, trapping the sellers who jumped in.
- BUY SIGNAL
- Close above the range’s upper line
- SELL STOP
- Below the range’s lower line or the recent low
- STRUCTURE
- Downtrend, range, false breakdown, reversal
- FAILS IF
- Price drops back below the lower band or the recent low
● PATTERN ANATOMY · MODEL
01 · ANATOMY
Four stages make the reversal
It forms at a market bottom, after a downtrend and a pause. Hover a card to light it up on the chart.
2Trading range
The decline pauses. Price moves sideways between an upper and a lower line.
THE PAUSE3False breakdown
Price breaks below the range, as if the downtrend were resuming.
THE TRAP4Reversal
Right after the breakdown, price reverses sharply and closes above the range’s upper line.
THE SIGNAL02 · FORMATION
Two rules decide if it counts
Wait for a clean structure before planning the entry.
A clean range
At least two valid bounces inside the range, so both lines are clearly defined.
2bounces minimum
A fast snap-back
The drop to the new low should be slower than, or as fast as, the rise back above the range.
▼ slow▲ fast
03 · SIGNAL & RISK
From the signal to the trade plan
Every Yard Charts alert draws these levels for you, so you know the entry and where the setup fails before you act.
Close above the upper line
The buy fires when price closes above the upper limit of the trading range, right after the false breakdown.
Stop below the range or the low
Set the sell stop below the range’s lower line, or below the recent low made by the false breakdown.
Controlled retest, or it fails
The setup is confirmed by a calm retest near the upper line. It fails if price drops below the lower band or the recent low.
Reading the risk/reward. The distance from buy to stop is your risk. Our alerts project a reward zone at three times that risk, so you see the potential before you enter.
04 · WHY IT WORKS
The breakdown was a trap. The sellers are caught.
A balanced rangeBuyers and sellers agree on value, so price moves sideways.
Stops triggeredThe break below pulls in new sellers and hits long stop-losses.
No follow-throughPrice can’t stay down, leaving the late sellers on the wrong side.
A sharp reversalTrapped sellers buy back as buyers return, driving price above the range.
05 · IN THE WILD
Real alerts from our scanners
Two Bottom Reversals flagged on the daily scan of 2026-10-09.
RAARATIONAL · Industrials
DAILY ALERT · 2026-10-09- BUY
- 578.00
- SELL STOP
- 565.00
- RISK
- 2.2%
- 3R ZONE
- 617.00
Close back above the 578 upper line after the false breakOpen the alert chart
NXGLNEXGEL · Healthcare
- BUY
- 0.1839
- STOP
- 0.1643
- RISK
- 10.7%
Where these come from
RATIONAL trades on Xetra and NEXGEL on Nasdaq, so both come with Standard. ETFs, Forex, Crypto and BSE are in the Free plan.
Compare plansHistorical performance
Historical cases show meaningful upside when confirmation and risk management are respected: wait for the close above the range, keep the stop under it.
Its bearish twin: Top Reversal
The same trap upside down. A false breakout above a range, then a sharp close back below it triggers the sell.
READ ALSO
The other seven patterns
Let the scanners spot the next trap.
Every alert comes with the buy, the stop and the reward zone. Free forever on 4 markets.