V-Bottom (Spike Reversal) Chart Pattern — How to Spot and Trade It

A vertical plunge that reverses just as fast — capitulation and instant recovery.

In plain words

A ball hitting concrete — the harder the drop, the sharper the bounce.

What the classic books say

The V-Bottom (Spike Reversal) is a reversal pattern with reference reliability Low and illustrative behaviour of Hard to anticipate (the kind of statistics catalogued in Bulkowski's encyclopedic pattern studies and Murphy's technical-analysis classic). Common at panic lows and flash crashes.

Level by level

Beginner

Straight down, straight up. Panic sellers hand shares to fast buyers.

Intermediate

Capitulation volume with an immediate engulfing recovery marks the shift.

Advanced

Confirmation comes from the speed of the recovery leg reclaiming broken levels.

Trade plan (educational template)

• Entry: After price reclaims the first broken support level.
• Stop-loss: Below the spike low.
• Target: Prior resistance zones on the way up.
• Check the numbers with the Risk-Reward calculator before any entry.

Common beginner mistakes

• Catching the falling knife too early

Practise it now

• ▶ Draw the V-Bottom (Spike Reversal) with live trendlines and a ghost forecast
• 📖 Full lesson in the Learning Hub

_Educational content only — not financial advice. Historical behaviour never guarantees future results._