Recently, I've seen more people asking about bottom-fishing, actually many are looking for that perfect bottom signal. I want to talk about the Arc Bottom pattern, which is a tool I often use for judgment.

The Arc Bottom pattern, simply put, is a typical sign of a very weak market. Imagine this: after a price decline, the downward speed gradually slows down, then the price starts to oscillate back and forth at low levels. On the candlestick chart, this looks like the shape of a pot bottom. Connecting these lows, you can see a downward-curving arc. The longer this pattern takes to form, the more impressive the subsequent rally usually is.

Volume performance is very critical. During the entire Arc Bottom process, volume initially shrinks gradually because both bulls and bears are hesitant to participate actively, making the price unusually dull. But as the Arc Bottom nears completion, volume begins to gradually increase, signaling a potential turn. If the price consolidates sideways while volume on bullish candles increases and volume on bearish candles decreases, then breaks out upward, it indicates that the main force is shaking out weak hands, and the future rally can be quite substantial.

Regarding entry points, I usually divide them into three stages. The first entry point is the most aggressive — when the price effectively breaks above the neckline, which is the horizontal line connecting the two highest points of the arc. The second is more conservative — after the price breaks through the neckline resistance and then pulls back for a test, often confirming support. The third is when the price pulls back to confirm support and then rises again, breaking through the previous high.

These entry points reflect different risk preferences. Aggressive investors can enter at the first point but should be prepared psychologically. Conservative investors might wait for the second or third point, which may result in smaller gains but with lower risk.

I want to emphasize that volume and price movement in the Arc Bottom pattern are basically synchronized, which is very important. Volume gradually decreases during the formation, then as the price rebounds, volume gradually increases, forming a smooth arc — this is a healthy confirmation. If volume doesn’t follow the price action, it might just be a false breakout.

Finally, a reminder: during the formation of the Arc Bottom, because the price appears very dull, this period can feel very long and test one’s patience. So, don’t jump in too early. The best approach is to buy when volume breaks above the neckline. This way, you can capture the main rebound rally while avoiding getting stuck at the bottom.

Investing involves risks. The above content is for educational purposes only. Always consider your own risk tolerance and market conditions when making decisions.