Triple top and triple bottom patterns produce an approximate 78% win rate. This pattern is another price reversal pattern. The triple top pattern is defined by three almost equal highs and a triple bottom pattern is defined by three almost equal lows, both with space in between.
Triple Top Pattern
The triple top pattern is complete when price breaks below the previous swing low points, and is considered successful when price moves at least the same distance of the furthest swing low.
Triple Bottom Pattern
The triple bottom pattern is complete when price breaks above the previous swing high points, and is considered successful when price moves at least the same distance of the furthest swing high.
When you recognize a triple top or bottom pattern, you can either A enter at market price once the breakout occurs or B set a pending order.
In the example to the right, you see a triple top pattern. The second trend line is the previous swing low and the pending order would be set just below for a short position.
Trail Stopping & Risk To Reward
After you have decided whether you will be entering at market price or setting pending orders, you must have a trading plan in place for take profit levels and solid risk management.
In my next lesson, I will be covering Bullish & Bearish Rectangle Patterns. If you missed out on last week’s lesson CLICK HERE to access.
See you then!