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Island Bottom

The Island Bottom forms when price is isolated by two gaps at the bottom.

Gap↓Gap↑IslandIsland Bottom: Gap down → Island isolated → Gap up → Rise

Pattern Details

Category

reversal

Success Rate

76%

Average Move

+17%

Duration

1-3 weeks

Pattern Structure

Pattern Structure
Key components that define this chart pattern
  • 1
    Downward gap: Price jumps down creating bottom
  • 2
    Island area: Isolated price trading
  • 3
    Upward gap: Price jumps up confirming reversal

Trading Rules

Trading Rules
Essential rules for trading this pattern successfully
  • ✓
    Enter long position when upward gap appears
  • ✓
    Volume is typically high at island
  • ✓
    Target = Height of the island
  • ✓
    Stop loss below island bottom
Trading Tips
  • Very rare pattern
  • Strong reversal signal
  • Good confirmation with high volume

Statistics

Breakout Statistics
Bullish Breakout76%
Bearish Breakout24%
Performance Metrics
Average Rise+17%
Average Decline-4%
Pullback Rate9%