What is an island bottom reversal chart pattern?

The figure shows an example of an island bottom reversal chart pattern. Price enters the island at A by gapping lower and another gap sharing the same price appears at B. The two gaps mark the island bottom boundaries. You can see why islands do not work well.

What are island tops and Island bottoms?

Island tops and island bottoms are reversal chart patterns set of by gaps at the same price level. Read more for performance statistics and ID guidelines, written by internationally known author and trader Thomas Bulkowski.

How do you identify island reversal patterns?

To identify Island reversal patterns, first look for an island gap that stands out on the chart. The gap will usually be large, anywhere from 2-5% or more from the previous closing price. After the gap, there should be a flat tight trading range for at least 1-2 weeks, often longer.