How to trade Triple Top chart pattern

Triple Top Chart Pattern Explained
  • In this article, we will discuss about the Triple Top chart pattern.
  • If you don't know how to trade the triple top chart pattern, Then this article will help you a lot. 
  • You can increase your knowledge about technical analysis by reading this article.

TRIPLE TOP PATTERN
  • The Triple Top is a technical analysis chart pattern that indicates a change in trend.
How to trade Triple Top chart pattern
  • A Triple Top chart pattern is a bearish trend reversal chart pattern. 
  • This chart pattern formed at the top after the end of an uptrend. 
  • A formation of a triple top pattern is a signal of a bearish trend reversal. 
  • Triple Top pattern is an extension of the double top chart pattern.
  • This pattern appears as a neckline with three peaks. 


• How is the triple top pattern formed? 

  • A Triple Top pattern formed after the end of an uptrend, Which indicates buyers are becoming weak.
  • When the price action moves up, it formed a higher-high and higher-low. 
  • The price is bouncing back before breaking the highs (first and second top), it means buyers are unable to make a new high above the previous high (first and second top), Which shows sellers are coming back.
  • The blue coloured horizontal line in the image is called the "neckline" of a triple top pattern.
  • After the triple top pattern breakout, the price action shifts from HH-HL to LH-LL (initiating the bear trend). 
  • The previous trend of the market was up, and after a Triple Top chart pattern breakout, the trend is reversed to the downside. 
  • Therefore, this pattern is called the bearish reversal chart pattern.


• How to recognize a valid triple top chart pattern? 

(a) A Triple Top pattern is valid if all three highs are almost same.
How to trade Triple Top chart pattern
  • (b) If price action forms a lower-high without breaking the previous highs, then it's a valid triple top pattern.
  • By connecting the three highs, it formed a slightly downward shifting trendline.
How to trade Triple Top chart pattern
  • (c) The second high break the first high, but the third high does not break the second high. 
  • Similar to the Head and Shoulder pattern.
How to trade Triple Top chart pattern
  • (d) If the third high breaks either the first or the second high, it is an invalid Triple Top pattern.
How to trade Triple Top chart pattern


How to trade the Triple Bottom chart pattern?

  • A triple top pattern is activated when the price action breaks below the neckline. 

• Entry :

  • Take entry when the candle is closed below the neckline. 
• Target :
  • The target should be equal to the distance between the neckline and the tops. 
• Stop Loss :
  • The SL should be placed above the previous top of the pattern.
How to trade Triple Top chart pattern


SHORT QNAs

1) What does triple top pattern mean? 
  • The triple top pattern is a technical analysis chart pattern that indicates a change in trend. 

2) Is triple top bearish or bullish? 
  • A triple top is a bearish chart pattern, which formed at the top. 

3) What is the success rate of triple top pattern? 
  • The success rate of the triple top pattern is approx 65-80%.

4) What is the opposite of triple top? 
  • The opposite of the triple top is the bullish triple bottom pattern. 

5) Triple Top pattern is a signal of ______.
  • Bearish trend reversal

6) What is triple top target price? 
  • The target price should be equal to the distance between the neckline and the tops. 

7) What is triple top stop loss price? 
  • The SL should be placed above the previous top of the pattern.

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