A Triple Bottom chart pattern is very similar in presentation to a head and shoulders bottom in that it contains three lows, albeit all occurring at an equal level. Like the head and shoulders bottom, the triple bottom is also as a reversal pattern.
The appearance of the triple bottom indicates the existence of a downtrend, which is currently in the process of transforming into an uptrend and is one of the patterns that takes the longest to fully develop, with an average formation time of around four months, however, there is a strong train of thought which decrees that the longer a trend takes to develop, the stronger the significance of the price move once breakout does occur.
As the triple bottom is potentially easily confused with other, similar patterns, such as the double bottom, or head and shoulders bottom and because true triple bottoms are quite a rare occurrence, many experts in the field have been known to advise to wait for signs of a breakout through the confirmation point before assuming that the emerging pattern is a true triple bottom.
Once the trend has been confirmed, a breakout should be accompanied by a burst in volume, although the majority of triple bottoms witness a pullback following breakout that result in a fallback to the breakout price.« Back to Forexpedia Index