Recently, I saw someone ask about bottom formation patterns again, so I want to share my understanding of the rounded bottom. To be honest, this pattern appears quite frequently in actual trading, and it's also one of my preferred signals for bottom fishing.

The rounded bottom is actually a typical feature of a very weak market trend, looking like a bowl-shaped bottom on the candlestick chart. You will notice that in the late stages of a decline, the price's downward speed gradually slows down, and it begins to oscillate repeatedly at low levels. During this process, if you connect the repeated low points of the oscillations, you can see a downward-curving arc. I think this is the most intuitive characteristic of a rounded bottom.

Trading volume during this process is also very critical. It initially gradually diminishes, reaching its thinnest near the lowest point, and then slowly starts to increase again. This volume-price coordination actually tells you that both bulls and bears are watching, and neither side wants to take the initiative to attack. Because of this, the process often feels very long, and you need patience to wait.

In practical trading, I usually look for three entry points. The first is the most aggressive—when the price effectively breaks above the neckline. If this is accompanied by a volume increase on a bullish candle, it indicates that the bulls are starting to gain momentum. The second entry point is the first pullback after the price breaks the neckline, which is often a more reliable entry. The third is when the price confirms support and then breaks through the previous high again.

My experience is that the longer the rounded bottom pattern takes to form, the greater the potential upside afterward. So don’t rush to enter; it’s better to miss a little than to jump in prematurely without a clear volume breakout signal. Especially when you see a combination of bullish volume, decreasing volume on bearish candles, and sideways price action, the subsequent upward move can be quite substantial, especially after the main force has entered to shake out and trap traders.

My advice is, when you see a rounded bottom pattern, don’t enter too early. Wait until the volume breakout above the neckline to buy, as this greatly improves the win rate. Of course, investing always carries risks, and everyone’s risk tolerance is different, so you should judge based on your own situation.