A visual pattern to show the consumers taking control of the price from the sellers is called a triple bottom pattern. It is considered to be the way to establish a consumer’s position. In the triple bottom pattern, we see a prolonged downtrend where the sellers or bears are the controllers of the market. The first bottom in the pattern is the normal price movement whereas the second bottom shows the buyers taking adequate reverse actions. In the third bottom, you’ll notice strong support and when the price breaks, the sellers can easily capitulate the resistance levels.
However, there are some rules in the triple bottom pattern where an existing downtrend is necessary to start with the patterns. It is needed for the three lows to be closely equal and spaced out from each other. The price doesn’t need to be the same but close to equal to ensure a horizontal trade line. A dropped volume is also very necessary throughout the pattern which is a sign of the sellers’ loss and the buyers’ win.
The dissimilarities between the triple bottom pattern and triple top pattern
The triple bottom and triple top are opposites. In the triple top, you’ll find the reverse actions by the bears to get through the resistance three times by posting three close equals. This is the mirror image of exactly what we had previously discussed about the triple bottom pattern. This is a prolonged fight between the buyers or bulls and sellers or bears where the buyers tend to win in this case. But there may be a winner on any of the sides then it becomes a long-term range to complete.
The Limitations of triple bottom pattern
The triple bottom pattern is sometimes uncertain while trading charting patterns to measure the probability. Among all the other patterns, the triple bottom pattern is considered to be the easiest when it comes to a trading opportunity. In this case, even double bottoms turn into triple bottoms as they cannot work that way. There is the target and stop loss placements within the pattern which does not ensure risk and reward tradeoff which might occur be an issue in some companies. The traders may want to put their stop loss within the pattern to be informed about the breakouts but it is not possible in the pattern.
What is the duration of the triple bottom pattern?
You can notice the price patterns during any charting period. The size and depth are very much related to the significance of a pattern. In the triple bottom, the price patterns start occurring only after the bears and the bulls are used to buying and selling. A significant consideration of price pattern is involved in the triple bottom while forecasting the price movement of the future. to selling and buying to some extent. There is a time when the price finally breaks out and then you can see the significant changes within the chart and the bottoms. If the duration is longer, it is the buyers who have to push through the levels to reach above the area of resistance.
Summary
It is considered to be the way to establish a consumer’s position. In the triple bottom pattern, we see a prolonged downtrend where the sellers or bears are the controllers of the market. The first bottom in the pattern is the normal price movement whereas the second bottom shows the buyers taking adequate reverse actions. However, there are some rules in the triple bottom pattern where an existing downtrend is necessary to start with the patterns. It is needed for the three lows to be closely equal and spaced out from each other. The price doesn’t need to be the same but close to equal to ensure a horizontal trade line. A dropped volume is also very necessary throughout the pattern which is a sign of the sellers’ loss and the buyers’ win. The triple bottom and triple top are opposites. In the triple top, you’ll find the reverse actions by the bears to get through the resistance three times by posting three close equals. This is the mirror image of exactly what we had previously discussed about the triple bottom pattern. This is a prolonged fight between the buyers or bulls and sellers or bears where the buyers tend to win in this case. You can notice the price patterns during any charting period. The size and depth are very much related to the significance of a pattern. In the triple bottom, the price patterns start occurring only after the bears and the bulls are used to buying and selling. A significant consideration of price pattern is involved in the triple bottom while forecasting the price movement of the future. to selling and buying to some extent.
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