What is a triple bottom?
A triple bottom is a bullish reversal chart pattern.
It forms when price tests the same support level three times without breaking below it.
The pattern consists of three lows, or bottoms, in the same price area. Two rebounds between them form a clear resistance level: the neckline.
Like its opposite, the triple top, it can appear on any timeframe.
How do you recognise it?
To recognise a triple bottom, you generally need the following:
- A downtrend before the pattern appears
- Three lows in the same price area
- Two rebounds between them that form a clear resistance level
- A break above the neckline to confirm the pattern
The three lows don't need to be exactly identical.
What matters is that the market reacts at the same support level.
One thing to watch is volume.
With a triple bottom, volume tends to fall from one low to the next. This shows selling pressure weakening with each attempt.
The main difference from a double bottom is a third attempt at support.
But it's generally rarer, because the market less often allows enough time for three successive tests of the same support to form.
It therefore takes longer to develop.
How do you trade a triple bottom?
The classic mistake is entering at the third low, convinced that the level will hold once more.
There are two good ways to enter:
- Buy the breakout: buy when a candle closes above the neckline
- Wait for a return to the neckline: after the breakout, price sometimes retests this level before moving higher again
The stop-loss can go below the area of the three lows.
