Technical Glossary / Chart Patterns
Rounding Bottom
A gradual saucer-shaped turn from decline to advance.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
A rounding bottom, or saucer, is a slow bullish reversal. Selling fades, price flattens, and demand returns, drawing a U rather than a spike low. There is often no single bar that "is" the reversal. The turn is the shape of many bars.
How to identify it
A long curve: lower lows that become equal lows and then higher lows, with the slope changing smoothly. A V is not a saucer. Volume, in the classic description, dries up in the bottom and expands on the rise.
Bullish reading
Traders treat a break of the lip, the high where the decline began or a clear shelf on the right side, as confirmation. Risk is under the right-hand higher low, which can be distant.
Bearish reading
A new low under the saucer cancels it. Slow bases fail by rolling over again, not always by a crash.
Common mistakes
Declaring a rounding bottom after a few candles. The pattern is defined by time and smoothness.
Limitations
By the time the saucer is obvious, price may have already risen a long way from the low. It is a poor tool if you need a tight stop.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.