The Triple Top is a reversal pattern that is characterized by three equal highs coming around the same price level, followed by a breakdown of the support level. The bullish version of this pattern is called the Triple Bottom. The Triple Top is not as frequently seen as the Double Top and the 3 tops may not be exactly equal. The two swing lows may not come at the same level too. The pattern is triggered when the lowest swing low of the pattern is broken on the downside, after the third top is registered. Triple Bottom follows exactly the opposite rule.
Most Used Trends of Triple Pattern
Advantages & Limitations of Triple Pattern
It must be noted that more Triple Top patterns are found in bear markets than in the bull markets. Generally, the pattern implication gives a target depending on the height of the range. The taller the range, the deeper the expected downside and sometimes the decline gets much sharper too. Sometimes, the breakdown is followed by a sharp pullback that tests the neckline from the downside before falling down again. This retesting of the neckline poses the greatest risk for the traders as a sustained rise may even reverse the downtrend.