Triple Top and Triple Bottom Patterns
Three tests of one level, and the awkward fact that a wider base makes the breakout trade price worse.
A triple top is three roughly equal peaks at one resistance area, and a triple bottom is three roughly equal troughs at one support area. Both are confirmed by a decisive break of the line joining the pullback points between the swings, not by the third touch of the level. The pattern height is commonly projected from the break as a rough objective.
What to remember
- Three touches means dense resting orders on the far side of the line, which explains both the clean breaks and the violent failures.
- The extra swing adds time, not reward. The stop has to clear the highest peak while the objective is only one pattern height, so a 170 pip stop can face a 135 pip target.
- If the pullback lows are rising rather than flat, it is an ascending triangle and carries a different bias.
- Decide in advance whether you are fading the level or trading the break, because the two need different stops and cannot both be taken on the same day.
Lesson 5 of 22 in Chart patterns
A triple top is three roughly equal peaks at the same resistance area with pullbacks between them. A triple bottom is three roughly equal troughs at the same support. Both extend the double pattern by one full swing, and both are confirmed the same way: by a decisive break through the line joining the pullback points, not by the third touch of the level itself.
The third test cuts both ways
The traditional answer is that a third test makes the level more significant, and it is worth being precise about why, because the reasoning cuts both ways.
The case for significance is that three rejections establish the level as one the market genuinely recognises. More participants have traded off it, more orders reference it, and a break therefore invalidates more positions at once. The case against is the mirror image. Each successful defence of a level attracts more sellers who place their stops just above it, so by the third test there is a dense pocket of buy stops overhead that a single push can trigger. The break may be large without meaning anything, because it was fuelled by forced exits rather than fresh conviction.
Both are true, which is why the useful reading is not "three is stronger than two" but "three touches means a lot of resting orders sit on the other side of this line". That is a statement about liquidity, and it explains both the clean breaks and the violent fakeouts.
A triple top on USD/JPY, with numbers
Suppose USD/JPY stalls at 157.20, pulls back to 155.80, returns to 157.15, pulls back to 155.70, returns to 157.25, then turns down again. The support line runs across roughly 155.75. The pattern height is 145 pips (157.20 minus 155.75), so a break below projects to about 154.30.
Entry on a four-hour close below the line fills near 155.65. The invalidation level is above the highest peak at 157.35, which is 170 pips of risk for 135 pips to the objective, about 0.8 to 1. Use the pip calculator to convert that into money for your account, because yen pairs price differently from the dollar majors and the number surprises people.
Note what the geometry does here, because it is the same trap the double top sets. The stop has to clear the highest peak and the objective is one pattern height below the break, so the two distances are almost the same and the raw break trade prices at or below 1 to 1. A third swing adds time and it adds resting orders. It does not add reward, because the pattern height has not changed. That is arithmetic rather than a flaw in your reading, and it is why a wide triple pattern is usually better treated as a level to watch than as a breakout to buy.
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Triple Top and Triple Bottom Patterns: questions
Is a triple top more reliable than a double top?
How many times can price test a level before it breaks?
What is the difference between a triple top and a rectangle?
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