How to read the triple bottom pattern? A triple bottom pattern formation occurs when the price of a currency pair cannot break below a certain resistance level and bounces back three consecutive times. If it is unsuccessful (which is supposed to be the case), a sell trade can be opened. It is also possible to trade more conservatively - it is necessary to wait not only for the breakdown of support but also for the price to return to the broken level for its retest. At this point, trades are opened to sell in the expectation that the downtrend will develop, at least on the range of the difference between support and resistance inside the pattern. This breakdown of support can be used as a signal to act. After that the quotes go down to the support level and, as a rule, if the triple top is formed, a breakout takes place. The first variant - we wait for the moment when the price touches a maximum (resistance level) for the third time. How to trade the triple-top pattern? There are two ways to trade in this pattern - to work on a breakout or a bounce. This is the psychology of the pattern, and what helps fuel the selloff after the pattern completes. As the price falls below the swing lows of the pattern, selling may escalate as former buyers exit losing long positions and new traders jump into short positions. If the price can't rise above resistance there is limited profit potential in holding onto it. Translated into real-life events, it means that, after multiple attempts, the asset is unable to find many buyers in that price range.Īs the price falls, it puts pressure on all those traders who bought during the pattern to start selling. How to read the triple-top pattern? Technically, a triple-top pattern shows us that the price is unable to penetrate the area of the peaks. However, you need bullish signs, not swings. Instead of waiting for a clear breakout, you can quietly watch the market - price could potentially turn down immediately after breaking above the notch line. How to trade a double bottom pattern? In the case of trading during the double-bottom pattern, most traders enter the market immediately after the price breaks above the notch line, but you can try a different approach. the pattern is considered to be complete only when the price breaks the neckline, i.e.If they don't, it's probably not a double-bottom pattern, but just a price consolidation after the second touch and the beginning of the bounce, volumes should be increased.if you see too much volume in the decline, there's a chance the price won't rebound a second time but will break the support level.Then it should start falling again on low volumes (this is very important)
after the first touch of the low, it should bounce back by about 15-20%.the shape of the pattern should resemble the Latin letter W.To determine whether or not a double bottom has definitely formed, traders can analyze other elements: Therefore in this case you can safely bet on the rise (and place the stop loss somewhere below the support level). The formation of the letter W indicates that an uptrend begins. How to read a double bottom pattern? This pattern always appears after a long downtrend.
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