Triple tops and triple bottoms are reversal patterns where price tests the same level three times before reversing. They are essentially double tops and bottoms with an additional test, making them rarer but potentially more significant. The three-touch structure confirms that a price level is acting as a strong barrier, and the eventual break of the pattern's support or resistance level triggers the reversal.
Three peaks (triple top) or troughs (triple bottom) at approximately the same level. Confirmation level is the lowest reaction low (top) or highest reaction high (bottom). Volume often decreases on each successive touch of the level. The third touch frequently shows momentum divergence on oscillators. More powerful than double tops/bottoms due to the additional rejection.
Enter on a confirmed break below the pattern's support (triple top) or above resistance (triple bottom) with volume expansion. Wait for a retest of the broken confirmation level for optimal risk-reward entry. Momentum divergence on RSI or MACD at the third touch adds strong confluence. The spacing between touches should be proportional — very tight clusters may not qualify.
Measured-move target equals the height of the pattern (from the peaks/troughs to the confirmation level) projected from the breakout. Place stops above the triple top or below the triple bottom. Take partial profits at 1:1 risk-reward and trail the remainder. Invalidation occurs if price reverses through the confirmation level after breakout.
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Triple tops and bottoms are often confused with rectangles — the key difference is the reversal context and the declining momentum on successive touches. Look for subtle lower highs on a triple top or higher lows on a triple bottom for the strongest formations. These patterns are most effective when they form after prolonged trends.
Bull and bear flags are continuation patterns consisting of a sharp price move (the flagpole) followed by a brief, counter-trend consolidation channel (the flag). Bull flags slope downward after an upward pole; bear flags slope upward after a downward pole. These patterns represent a pause in strong momentum before the trend resumes, and they are among the most commonly traded continuation setups.
Diamond patterns are relatively rare reversal formations that combine a broadening pattern followed by a symmetrical triangle, creating a diamond-shaped outline on the chart. They typically appear at market tops (diamond top) or, less commonly, at bottoms (diamond bottom). The pattern signals an exhaustion of trend momentum as volatility first expands then contracts before a decisive breakout.
Rising and falling wedges are converging trendline patterns where both support and resistance slope in the same direction. A rising wedge (both lines slope upward, converging) is typically bearish, while a falling wedge (both lines slope downward, converging) is typically bullish. Wedges differ from triangles because both trendlines slope in the same direction rather than converging symmetrically.
Rectangle patterns form when price trades sideways between two parallel horizontal lines — a clearly defined support and resistance. Rectangles represent a period of equilibrium where buyers and sellers are evenly matched. The pattern resolves when price breaks decisively through one of the boundaries, often continuing in the direction of the prior trend.