Double Cross (Cross Line) Pattern: Practical Guide to Capturing Market Bottoms

In a bull market, buying during downward movements and entering during adjustments is an optimal strategy. When a pattern called "double cross" appears, it signals the end of the adjustment and the beginning of the next upward movement. I hope this practical trading method will be helpful for your investments.

What is a Double Cross Pattern

Double cross is a distinctive combination of candlestick patterns, and it has the following characteristics:

1. Composed of 2 candlesticks
2. The first one is a medium bullish candle or a large bullish candle.
3. The second one is a long cross line, positioned above the right shoulder of the large bullish candle (the cross line can be either a bearish or bullish candle).

This is called the "Yosen Right Shoulder Cross" pattern.

Market Interpretation of the Double Cross Pattern

1. Appearance in the bottom price range: When the price is at a relative bottom price range, it typically becomes a starting pattern for a rise. A long doji line functions as a midpoint for the upward movement and plays a role in the adjustment. In this case, it is a signal for an aggressive entry.

2. Appearance during a rising trend: If it appears during a major rising phase, it functions as a temporary adjustment and indicates a preparatory stage for accumulating energy to rise again. In this case, it also serves as a good entry point.

3. Appearance in the High Price Zone: If it appears in the high price zone after a significant rise, it serves as a signal for a peak, so you should consider closing your position.

In this way, the bullish right shoulder cross has different meanings depending on the market environment, and trading decisions need to be adjusted according to the situation.

Practical Interpretation of Double Cross Pattern

1. After a gradual increase in trading volume in the bottom price range, if a large bullish candle (or a new high) appears accompanied by volume, and at the same time the volume indicator forms a golden cross, aggressive buying is effective.

2. If a bearish candlestick appears on the first day and a bullish candlestick appears on the second day, engulfing the previous day's bearish candlestick, a buy entry is valid after the closing price on the second day.

3. When a long upper shadow doji is formed with increased volume on the first day with a bullish candle and a rise followed by a downward movement on the second day (for BTC, more than 2%), usually on the third day, a large bullish candle will appear that engulfs the shadow of the second day. Entering after confirming the pattern on the second day is effective.

4. When the cryptocurrency rises towards the major moving averages (such as monthly lines) from the formation of a bottom (V-shape, W-shape, round bottom) and breaks through with accompanying volume, a strategy of buying on pullbacks or chasing after the breakout becomes effective.

5. In a medium-term rise market, there are usually cases where bullish candles appear for 7 consecutive days. By entering near the resistance line break on the 3rd day, there is a possibility of enjoying further rises of more than 10% thereafter.

Conditions for the Appearance of Double Cross and Confirmation Points

1. It is a signal of adjustment and consolidation during the rise.
2. The trading volume decreases during adjustments.
3. Two doji patterns appear near the bottom price.
4. The volume corresponding to the cross line shows a very small amount, indicating a bottoming signal.
5. The entry timing will be when a bullish candle and an increase in trading volume are confirmed.

Utilize this technical pattern to effectively capture the market's bottom prices in your trades.