Triple Top Pattern Explained
Triple top pattern, shortly called as TT is a technical analysis chart pattern which is determined at the market tops and can be seen in every financial market, including Forex and the stock market for example. Among the many different chart patterns, the Triple Top (TT) is the best and authentic chart patterns examined in the trade analysis chart. The TT pattern remains distinct from the head and shoulders pattern, apart from those 3 peaks remaining top with the similar price level that works like the double top.
The 1st peak occurring in the triple top patter is made while the rates drop down in the consolidation of the clear market phase. Rates will further accelerate up to a standard of the 1st peak where buyers will stop gaining maximum benefit for pushing the rates by means of resistance. Also the 3rd peak is made in a similar way. This formation is the opposite of the triple bottom pattern.
Main features of the Triple Top
As discussed above, triple top will look like 3 sharp peaks with similar levels in at all the point. Generally, TT arises while the market is on its peak time with an uptrend. The 3 peaks should remain sharp and definite, while the low could look like a rounded valley. This chart pattern remains comprehensive while the rates drop below the least low in the structure pattern. Bulkowski state that, the TT pattern is formulated with multiple variations and suggest the traders to set a well-defined congestion pattern.
Main features of the Triple Top pattern
- The triple top pattern occurs when the market is in uptrend, indicating a possible peak and depletion of the buying momemtum in the market.
- Once complete, this formation implies a downward corrective phase, ie a change in the trend from bullish to bearish trend.
- It is a figure that can be seen very often in the market indicating turnaround phases, so the trader must pay attention to it.
- Like the triple bottom pattern is quite reliable, meaning that the trader can use this figure as an indication for a possible change in trend.
The importance of Triple Top pattern:
Quite similar to the head and shoulders pattern, the top patterns resemble the same. Triple Top is believed to be the reliable chart pattern, and the expert Schabacker gives enough explanation for implementing this chart pattern in the trade. With 3 consecutive attempts, the triple top pattern breaks by means of a resistance level. Hence, the rate could never exceed beyond a particular limit, regardless of these 3 peaks.
Example of Triple Top Pattern