Triple Top and Triple Bottom patterns
Thirty Second session of Forex Training
Welcome back to Forex professional training in financial markets.
Triple Top and Triple Bottom patterns will be studied in this session.
Triple Top Patterns
On an uptrend direction, a Triple Top pattern is formed from three consecutive peaks with various height and width which indicate a reverse direction.
Neckline or confirmation line is a level line on the most bottom valley. When market price passes Neckline, breakout point will be formed.
If each valley passes the 38.2% level of Fibonacci pattern, which is drawn on the uptrend, the given Triple Top pattern will not be valid anymore.
H is a vertical line between the highest peak point and the Neckline.
TP would be H pips away from the breakout point, while SL would be above the peak point of the highest wave.
Triple Bottom Patterns
On a downward trend, a Triple Bottom pattern is formed by three consecutive valleys with different or the same height and width.
Neckline or confirmation line is a level line on the highest peak point which indicates the breakout point.
If peak point passes the 38.2% level of the Fibonacci pattern, which is drawn on the start point of trend to the most bottom valley, Triple Bottom pattern will not be reliable.
H is the vertical distance between the bottom of longest valley and the Neckline.
TP price is H pip away from breakout point while SL price is lower than the most bottom valley.
Some useful examples will be studied on MT4. A downward trend, followed by triple waves which formed a Triple Bottom pattern.
There are 3 consecutive valleys with different height in which Neckline can be drawn on the highest peak and a helpful level can be placed on the most bottom valley.
Fibonacci pattern shows us that peak points did not pass the 38.2% level, thus this is a valid Triple Bottom pattern.
H and H/2 points can be identified by Fibonacci pattern.
Another Triple Bottom on a downward trend can be drawn, in which Neckline is placed over the highest peak point.
A Trader could place a Buy order on the breakout point.
Fibonacci pattern shows that this pattern is reliable, also H/2 and H pips above the breakout point were reached after some fluctuations.
Price has decreased until 50% of Fibonacci, however, TP price has been met by the market price.
Another Triple Bottom that can be drawn easily by using a Trendline.
A Triple Top on an uptrend that consists of three successive peaks. After breakout point has been crossed, TP on H and H/2 has been passed by market price.
A Triple Top pattern on a wide trend, with 3 different peak heights. After price has met the breakout point, it reached TP prices.
Triple Top and Triple Bottom patterns are formed rarely, with powerful effect on trend direction that can be used alongside of special candlesticks patterns and R strategy(R strategy will be explained in session 67).
That concludes this session, until next time and another session take care.