Lesson 4 of 9
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Triple tops and bottoms (10)

Phillip Konchar

 

Triple tops and bottoms

The triple top and bottom patterns are an extension of the double top and bottom patterns introduced in the last lesson. With the triple top and bottom, we get another high and low before the support or resistance break. Like with all price patterns the trader is looking for a trend into the pattern. High volatility, more height and a long duration all adds to its weight.

Triple tops

Triple bottoms

The triple bottom is again the inverse, with confirmation coming as resistance is broken.

Trading triple tops and bottoms

Traders trade these patterns in much the same way as they do double tops and bottoms.

  • Price target for triple tops: the take profit target is set by projecting the height of the pattern, down below the breakout from support.
  • Price target for triple bottoms: the take profit target is set by projecting the height of the pattern, up above the breakout from resistance.
  • Stop loss: for triple tops this can be set above the support level.
  • Stop loss: for triple bottoms this can be set below the resistance level.

This is a triple top in the AUD/NZD currency pair, the support is a zone, rather than a precise level. There is a bullish trend into the first top, two lows, and two highs before it tested support for a few days, there was then a really bearish marubozu as it broke through and the pattern confirmed. This one didn’t return to test the old support zone, it just headed south.

Key Learning Points
  • Triple tops and bottoms are extensions of double tops and bottoms, with an additional high and low.
  • The patterns have the same confirmation and trade setups as double tops and bottoms.

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