Triple Bottom

This pattern is exactly opposite to Triple Top pattern.

The Triple Bottom pattern is a bullish reversal pattern that is formed by three consecutive lows at approximately the same price level.

The Triple Bottom formation occurs when a stock price falls for a while to new lows, bounces back with moderate rally. Falls again to test previous low, but buyers push it up. Repeats third time creating three bottoms at same level. Finally buyers win the battle and price moves significantly higher

  1. Triple Bottom Pattern

    The triple bottom pattern is a bullish reversal pattern that suggests that the price may have reached a bottom and that a reversal in the trend is likely. Traders often look for this pattern as an indication that it may be a good time to buy an asset or to take a long position.

    • It's a bullish reversal chart pattern that forms after a downtrend.
    • The price needs to break above the resistance level or "neckline" formed by the two intermediate peaks to confirm the pattern.
    • Volume should increase as the price approaches the bottom of the pattern, indicating accumulation.
    • The pattern is not truly valid until the price moves above the peak established between bottoms #2 and #3.
    • Traders may use this pattern to identify potential buying opportunities.

How to take position in the market?
- Depending on trading psychology and individual risk, some Traders follow below rules to enter into positions.

  1. Entry

    • Wait for the pattern to be confirmed by the price breaking above the neckline/resistance line, with increasing volume.
    • Once the breakout occurs, consider entering a long position, with a stop loss set below the lowest point of the pattern.
    • Few traders may choose to enter a long position on a pullback (price correction) to the neckline if they missed the initial breakout.

  2. Target

    • Measuring the height of the pattern from the neckline to the lowest point of the pattern, and then adding this distance to the breakout point.
    • Technical analysis tools such as support and resistance levels, Fibonacci retracements, or trend lines to help identify potential target levels.

  3. Stop Loss

    • Common approach is to set the stop loss below the lowest point of the pattern(support level). This is because if the price drops below this level, it could indicate that the bullish reversal pattern has failed.
    • Another approach is to set the stop loss just below the neckline if to have risk concern.
  • The triple bottom pattern is a relatively short-term pattern that may not be as useful for longer-term investors or traders. It is typically used to identify short-term reversals in price trends.
  • Its Not mandatory that all 3 bottoms should be at same price level.
  • In a triple bottom pattern, when the neckline is broken, the market often attempts to return and retest the same neckline level again for price correction.

    • Example-1 : Triple Bottom pattern with strong support Level and Broke the Neckline

    Example-2 : Triple Bottom pattern with Neckline breakout

    Example-3 : Triple Bottom pattern with Target

    Example-4 : High probability of Failure of Triple Bottom pattern, as there is a Strong resistance zone. Try to avoid taking trade in this situation if you are new to Trading.

    Example-5 : Triple Bottom pattern breakout with RSI and MACD Confirmation.

    Example-6 : Price drop suddenly after Triple Bottom pattern breakout to Trap traders

    Example-7 : Triple Bottom pattern with Target

    Example-8 : Triple Bottom pattern

    Example-9 : Triple Bottom pattern with Entry, Target and Stoploss

    Example-10 : Triple Bottom pattern with min Target



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