But the large momentum of sellers at the resistance zone results in failure in breaking the resistance zone. Instead, sellers break the support zone created by buyers and reverse the trend. During the first failed attempt of buyers to break the resistance zone, the sellers increase in number. In the second failed attempt, more sellers come in to play. In the third attempt, a large number of sellers come in and break the support zone. This causes the trend reversal, and it is called the triple top pattern.

The price must be in overbought condition for this phenomenon or chart pattern to work correctly. After the breakout confirmation, the next step is to make a trading plan to sell a currency pair.

There are two methods to open a sell order after neckline breakout. In the first method, Trigger sell order just after the breakout of the support line with a big candlestick. In the second method, wait for a pullback after breakout and then open a sell trade. Take profit level is measured by mirroring the length between high and low of swing waves of the triple top pattern. Extend the take-profit by multiplying the length of the first take-profit level with a 1.

It will increase the risk-reward ratio. It is the simplest and widely used chart pattern in technical analysis. Due to this reason, there are many false signals based on this pattern that will make you lose in trading. To filter out good trade setups, add confluences to your strategy to increase the winning ratio. In this Triple top strategy, three confluences have been added. Chart patterns are widely used by retail traders to analyze the market technically. But in forex trading, you will become a winner only if you are unique from other traders.

This process will make you become a top-level trader that does not trade every single chart pattern. No, it is a bearish reversal chart pattern that turns bullish trends into bearish. It works on every timeframe. But H1, H4, and daily timeframe work best for this chart pattern. It will draw real-time zones that show you where the price is likely to test in the future. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.

F Forex Chart Patterns. Table of Contents Hide What is Triple top pattern? How to identify Triple Top chart Pattern? What is neckline? Breakout of neckline What does triple top pattern tell the traders? Trading plan for triple top pattern Open a sell order Stop-loss Take-profit Risk Management Triple Top chart pattern trading strategy Trading strategy The Bottom Line.

Is triple top a bullish pattern? It then retraces again, rallies to a similar high, and then declines again. There are three price peaks in the same price area in this case and includes two retracements as well.

Traders can use a trendline to connect the two retracement lows, extending it to the right, which they can then use for trading and analyzing purposes. It may happen that the market seems like hitting a brick wall at a particular level and cannot get through even after trying three to four times.

This is indicative of the presence of a large resting order from a patient market participant who has a big size to move. More and more people start to notice the particular level as high or low. Therefore, by the time the trader gets a triple or quadruple top, the level is already important as everyone is noticing it.

Traders can use double and triple tops as an excuse for the reduction of a profitable position. They can also use them as breakout levels for jumping on to an existing trend. They should expect a new round of demand from stop loss sellers and longs who start to add to their positions once the double or triple top breaks. The above graph shows a triple top at 1. The long wicks on the daily candles indicate the presence of several intraday stabs through the level where the triple top forms.

At the end of , there is an aggressive spike to 1. However, the 1. Another thing to note here is the failure to hold above 1. The Double and Triple Top is a simple yet effective set up. They may be expecting reasons such as oil going higher for fundamental reasons, or that the bank of Canada is worried about currency weakness. Here, there is a major round-number resistance at 1.

After failing three or four times, it forms a triple or quadruple top. Here the dotcom bubble is marked at This setup is helpful as it allows traders to sell with leverage as they risking just a little. They can simply sell near the double or triple top, putting a stop above it.

Here, traders should sell at the multiple tops at 1. They can put a stop loss on the other side, i. The stop is far enough, only to withstand a minor breach of up to 1. In this case, by risking only 37 pips, traders can find opportunities of making or even pips on a single trade.

Traders should select those patterns where the potential reward is at least twice as much as their risk. Double and Triple tops are traded in different ways, which involve different entry points, stops, etc. When trading this pattern, more emphasis should be given on finding short entry positions instead of long taking long positions.

The triple top pattern is a bearish reversal pattern that occurs at the end of an uptrend and consists of three consecutive tops along with the same resistance level.

As the name suggests, a triple top is a bearish technical analysis chart pattern that occurs after an uptrend and tests the highest price three times before it starts a bearish downward movement. Much like other reversal chart patterns, the triple top pattern is used to predict the end of the previous trend and helps traders find good entry levels. In terms of structure and characteristics, triple top chart patterns are made of the first, second, and third peaks at the same level and a neckline that serves as a support level.

It is similar to the double top pattern as well as the head and shoulders pattern. Get free access to our live streams and our market analysts will show you exactly how to read the charts. A triple top pattern occurs when an asset reaches a certain resistance level and cannot move above it.

When this happens twice, the chart pattern is known as the double top pattern , but when the price tests the highest level three consecutive times, the pattern is known as a triple top pattern and it provides a stronger trend reversal indicator than the double top pattern. This is how the triple top chart pattern works. As we said before, it is a fairly simple chart pattern, especially when compared to other advanced patterns. So, in a nutshell — to identify, use and trade triple top chart patterns, follow these 5 steps below.

In essence, using a triple top pattern is straightforward and the rules are simple to follow. Whenever you find a chart pattern with three tops and a break below the neckline, a short sell trade should be made. However, to increase the chances of success, it is important to confirm the pattern with other technical indicators and develop an effective trading strategy.

For that purpose, we have decided to show you two examples — the triple top pattern combined with Fibonacci levels and the MACD Moving Average Convergence Divergence. The MACD is a technical analysis indicator primarily used to identify trend reversals. For this demonstration, we use the same chart from the above example but this time, we added the MACD indicator as another tool to confirm that the breakout below the neckline is not a false breakout.

As you can see, the MACD crossover occurs exactly at the time the price breaks the neckline, which helps to confirm the trend reversal. Another great way to confirm a trend reversal when using the triple top pattern is to draw Fibonacci retracement levels. Further, in this case, a trader can place the stop-loss order at a Fibonacci level above the neckline and ensure the stop loss will not be triggered too early.

Finally, when the price breaks the neckline and falls again after the retest of the Basically, yes. A triple top formation indicates that buyers cannot overcome the selling pressure.

Therefore, once the last price drop occurs following the third top, sellers are in control and a bearish trend reversal is likely to happen. On the other hand, the triple bottom pattern, which is the same pattern made of three failed attempts to break the support line, is a bullish trend reversal pattern. Normally, when the triple top pattern appears and the price breaks below the support neckline, prices are expected to continue falling.

There are many external factors to consider, and it largely depends on the trader and the correct use of risk management tools. Still, the triple top is certainly one of the most reliable and accurate chart patterns indicators to predict the next price movement, especially for short-term traders.

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Expand Offer. Table of Contents. Do you want to learn more about chart patterns? Join Free Now. Pros Easy to identify Among the most accurate and reliable trend reversal patterns A great method to identify trend reversals.

Cons Not occurs very often Stop-loss can be triggered when the price pulls back Fibonacci levels can be used to solve this problem. Key Points to Take Away. Get your free access today to join our academy to career funded trader program Join Free Now. Get free access to our Trade Room Join now. Google Facebook Apple. Please enter your full name. Please enter your email. Please enter a username 3 to 20 characters.

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Confirm the validity of the pattern. One reasonably popular chart pattern is triple top. Any fib level , or number of candles? A triple top pattern occurs when an asset reaches a certain resistance level and cannot move above it. Investopedia is part of the Dotdash Meredith publishing family. What Is a Triple Top? Traders can also take buy positions after the first two lows.

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