# Trader Notes #4 - Rounding bottom

By [Teddy](https://paragraph.com/@teddyz) · 2021-12-06

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Chart patterns are an integral aspect of technical analysis, but they require some getting used to before they can be used effectively. A chart pattern is a shape within a price chart that helps to suggest what prices might do next, based on what they have done in the past. Chart patterns are the basis of technical analysis and require a trader to know exactly what they are looking at, as well as what they are looking for.

Best chart patterns #4 Rounding bottom:

A rounding bottom chart pattern can signify a continuation or a reversal. For instance, during an uptrend an asset’s price may fall back slightly before rising once more. This would be a bullish continuation.

An example of a bullish reversal rounding bottom – shown below – would be if an asset’s price was in a downward trend and a rounding bottom formed before the trend reversed and entered a bullish uptrend.

![](https://storage.googleapis.com/papyrus_images/7a670acc6816bd57514a61e217fa6a34766d34e131759852e4594e8ce05f2f37.png)

Traders will seek to capitalise on this pattern by buying halfway around the bottom, at the low point, and capitalising on the continuation once it breaks above a level of resistance.

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*Originally published on [Teddy](https://paragraph.com/@teddyz/trader-notes-4-rounding-bottom)*