Adam and Eve Trading Pattern Explained
Introduction
The Adam and Eve pattern is a variation of double top and double bottom patterns.
Slightly different from traditional double bottoms/tops.
Adam and Eve Double Bottom
Formed in a downtrend
Two bottoms are created before the upward price movement
Adam: First bottom in the shape of a V (peak at the support line
Eve: Second bottom in the shape of a U.
Indicates a strong price level unlikely to be broken, signaling a shift in market sentiment.
Breakout Trading Strategy
Recommended for trading with the Adam and Eve pattern.
Enter a trade when the price breaks above the resistance line or below the support line
Set a stop loss at the neckline level.
Volume's Crucial Role
Volume confirmation is essential.
Confirms buying or selling pressure.
Provides a strong signal for a trend reversal.
Practical Showcase on $ES
We can see how the pattern formation starts with a sharp downside continuation that looks like a V shape then formed the neckline with U shape before a breakout and hold above the resistance level that lead to an upside continuation.
