What is a Triple Bottom Pattern? #stockeducation #stockmarket

A triple bottom is a reversal Forex chart pattern that appears at the end of a downtrend and signals the beginning of a new uptrend or bullish trend. This is a bottoming price formation structured in three sections:
• First, we need to have a downtrend that makes lower lows followed by lower highs.
• Second, you have a period of consolidation where price is testing a support level three consecutive times, but each time it fails to advance lower and it turns back in the range. The support level doesn’t need to be a precise price level it can easily by a price zone.
• Last element we need to see a break above the current established range in order for the triple bottom pattern to be confirmed.

The most important part is how to correctly trade the triple bottom pattern. The most effective strategy is to buy at the market once we get a break and close above the established resistance range. The ideal place to hide our protective stop loss level is obviously below the triple bottom pattern because a break below will normally invalidate the triple bottom pattern. The take profit level is calculated by measuring the distance between resistance level and the triple bottom support level.