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- Triple Top
Triple Top Pattern: Forex Chart Pattern
The triple top is a price pattern generally formed in an uptrend suggesting following reversal and a drop in prices. It is considered more significant than the double top pattern.
Formation
The triple top is represented by three consecutive tops locates roughly at the same level and two bottoms. Resistance and support lines connect the tops and the lows respectively. The resistance is believed to be strong as the price reverses three times from the level where the asset is considered overpriced.
Interpretation of Triple Top
If the price falls below the pattern’s minimum or support level (plus certain deviation is possible), the formation is then completed and can be interpreted as change in direction of the trend downwards serving as a sell signal.
Target price
Following triple top pattern formation the price is generally believed to drop at least to its target level, calculated as follows:
T = S – H, Where:T – target level;
S – support level (recent local lows);
H – pattern’s height (distance between support and resistance levels).
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