Recently, I’ve been reviewing some bottom reversal cases and found that the process of building a bottom is really crucial. Many people actually don’t understand its true nature.

In simple terms, building a bottom means that after a long period of deep correction, there are signals indicating that bullish forces are starting to enter. But this isn’t an instant process; it’s a gradual one. I’ve noticed that when trading volume begins to increase and the market shifts from a pure supply-and-demand game to an influx of new capital, that’s a very clear turning point. At this stage, the bulls start to take control, buying enthusiasm gradually heats up, and eventually, this will be reflected on the candlestick chart as a typical pattern—a bullish candle with a noticeably long lower shadow.

Regarding the specific manifestations of building a bottom, I’ve summarized a few practical observation angles. First, this pattern always appears after a significant decline or during a sideways consolidation phase. Second, the bullish candle’s real body should be large enough, usually not less than 6% (if looking at the index, generally not less than 3%). I also found that both upper and lower shadows are relatively short, sometimes even nonexistent, which actually reflects a consensus among market participants.

Another important detail is that the trading volume on that day must be quite noticeable, indicating that new funds are indeed entering the market. Usually, bottom-building patterns appear in two scenarios: one is triggered by technical factors, such as a rebound after a large decline; the other is driven by news, where favorable information makes this pattern more likely to appear on the same day.

My personal experience is that once you identify this bottom-building signal, the subsequent upward potential is often quite significant. Therefore, in actual trading, this pattern deserves close attention.