The triple top price pattern usually forms in an uptrend followed by several reverse and drop in currency price. Compared to double top triple top has a more significant role. The Triple Top pattern is characteristic to the bearish market. It is a reversal pattern observed on line charts, bar charts, and candlestick charts. It is characterized by three equivalent highs which are followed by a break below the support. It is common for this pattern to form during 3-6 month period.
Triple Top Formation
Compared with double tops which more frequently form in the charts, triple tops are rather rare. Triple top the volume gets reduced through the second move up and at the same time becomes lesser. In case of triple top formation the highest points may not necessarily be spaced equally as it is in double top. At the same time the prevailing fields may slide to the same level in bottom, which means that either of them can be lower. It is undoubtedly the formation of triple top when the third top falls lower than the lowest point among the three crests. Support and resistance correspondingly connect the tops and the lows. In this patter the resistance is considered to be strong while the price reverses three times.
Triple Top Interpretation
It is always advantageous to understand the formation of the triple top and execute beneficiary trade. No doubt that the first and the second peaks are the ideal position to open a sell order. If prices continue moving up after the double top has been confirmed, this is a great opportunity to sell. Observations show that it is very rare for this pattern to have four tops and bottoms at the same level. If however, the trendline continuous to rally up to the level of the previous three tops, there is a good chance that it will continue to a higher point.
In the triple top the price formation is normally calculated the following wa:
T = S – H,
In this formula:
T stands for the target level;
S is the support level (recent local lows);
H is pattern’s height (distance between support and resistance levels).