Price Action Strategy lover

Double Low Higher Close (DBLHC)

Double Low Higher Close is another classic bullish reversal pattern loved by Price Action traders.

What are Double Low Higher Close (DBLHC) Patterns?

The DBLHC pattern consists of two candles.

The Lows of both candles need to be very close (within few pips).

The Close of the 2nd bar need to be Higher than the previous bar's high.

Why are Double Low Higher Close (DBLHC) Patterns formed?

Price tests support level twice but is rejected and cannot close below.
DBLHC pattern represents a sudden shift in the order flow, which can often be a telling sign of a short or long term uptrend.

How to find Double Low Higher Close (DBLHC) Patterns?

Price Action Tracker has you covered, the candlestick scanner will scan, in real time, all your favorite markets and time-frames and alert you as soon as a Double Low Higher Close (DBLHC) Patterns is detected.

How to trade Double Low Higher Close (DBLHC) patterns?

Double Low Higher Close can be traded as a reversal candlestick pattern when found at the bottom of a short term trend and validated by support levels.

Where to Place your Entry, Stop Loss and Take Profit?

There are three ways to enter a Key Engulfing reversal trade. They all have Pros and cons and really depend on the trader as well as the market conditions.

Aggressive entry (Candle close Entry)

Simply place a market entry.

Standard entry (Break of candle Entry)

Enter on a break of candle by placing a stop order just beyond the candle (1 or 2 pips).

Retracement Entry

Wait for the market to retrace to some extent before entering a trade.
Using retracement entry to get better Risk: Reward scenario can be very profitable but you might miss on a lot of trade if the market doesnt retrace.
Most traders always use the 50% retracement entry, but before deciding of a % figure you should always ask yourself what kind of price action environment are you in? Are we in a trend or a range? What are previous high and previous low? And then decide where the retracement entry would make the more sense (could be 33%, 60% or even 75%).
Going for a 50% retrace entry each time will get you a retail traders entry, not a professional one.

Stop loss

Stop loss is a level in the market that would need to be breached for you to be prove wrong and get you out of an investment.

A good rule of thumb is to place your stop loss few pips beyond the tail of the bar.

When to move Stop Loss

Once a trade has triggered and price has moved in your favor a bit, you can move your stop loss to break even.
I personally move my stop loss to break even once a candle has closed above the 1:1 target.

Take Profit

This is left to the trader’s discretion, however a good profit target is to use the next key level of resistance for a long trade, or the next key level of support for a short trade.
Traders should always aim for a return on investment higher than 2:1, if your Profit/Risk ratio is lower than 2:1 you may want to skip that trade or amend your Entry point in order to get a much better Profit/Risk ratio.

Our Position Size Calculator will allow you to decide if a trade is worth to take, when to enter it and what should be the right position sizing.

Summary

DBLHC patterns are great to trade, but like all price action setups and patterns, they perform better when used in conjunction with a trend or support levels, this is why using our Price action indicator and its price action filters is so important.