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Written by Nathalie Okde
Fact checked by Rania Gule
Updated 20 February 2025
The triple bottom pattern is a well-known bullish reversal pattern in technical analysis.
It indication a potential reversal from a downtrend to an uptrend, implying that an asset’s price of an asset has found a solid support level.
The Triple Bottom Pattern is a bullish reversal pattern that indicates a potential shift from a downtrend to an uptrend.
It forms with three distinct lows at roughly the same level, creating a solid support line.
The pattern is confirmed when the price breaks above the resistance level formed by the highs between the lows.
Effective trading strategies include identifying the pattern, confirming the breakout, setting a stop loss, and determining a profit target.
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The triple bottom pattern is a bullish reversal pattern found in technical analysis. It signifies a reversal from a downtrend (bearish) to an uptrend (bullish), indicating that the price of an asset has found a solid support level.
A support level is a price point where an asset tends to find enough buying interest to prevent it from falling further, acting as a floor in the market.
The bullish triple bottom pattern has a distinctive shape that can be divided into several key components: three lows with highs in between, a support level, and a breakout point.
First, the triple bottom pattern forms with three distinct lows, which are roughly at the same price level.
First Low: The first low marks the initial point of strong support. When the price reaches this low and bounces back, it suggests that buyers are beginning to enter the market, but the bearish trend is still dominant.
Second Low: The second low reaffirms the support level. When the price fails to break below the first low and rises again, it indicates that the support is holding firm. This second low strengthens the confidence that the bearish momentum is weakening.
Third Low: The third low confirms the support level as a significant barrier against further price declines. By this point, it becomes evident that the selling pressure is diminishing, and buyers are increasingly stepping in at this level.
Moreover, there are highs between these lows. Between each low, the price rises, forming two intermediate highs. These highs create a resistance level. The resistance level is crucial as it marks the point where the price needs to break through for the pattern to be confirmed.
The following component is the support level. The price level where the three lows occur is a strong support line.
This line shows that buyers are consistently stepping in at this price point to prevent further declines, reinforcing the idea of weakening bearish momentum.
Lastly is the breakout point. The pattern is confirmed when the price breaks above the resistance level formed by the intermediate highs.
This breakout indicates a shift in market sentiment from bearish to bullish, signaling that the downtrend is over and an uptrend is likely to begin.
The primary difference between the Triple Bottom Pattern and the Double Bottom Pattern is the number of lows. While both patterns indicate a bullish reversal, the Double Bottom forms with two lows, whereas the Triple Bottom forms with three.
This additional low in the Triple Bottom Pattern often suggests a stronger and more reliable support level, providing a more robust bullish signal.
The presence of three lows indicates a persistent defense against price declines, which can be a more convincing sign of a trend reversal compared to the Double Bottom.
The triple bottom and the triple top patterns have opposite implications.
The triple bottom pattern indicates a potential upward reversal, signaling the end of a downtrend and the beginning of an uptrend.
It is characterized by three lows at roughly the same level, showing strong support.
On the other hand, the triple-top pattern suggests a bearish reversal, indicating the end of an uptrend and the beginning of a downtrend. The Triple Top is formed by three highs at approximately the same level, demonstrating strong resistance.
This pattern shows that the price repeatedly fails to break above this resistance, indicating that the buying pressure is weakening and sellers are gaining control.
Triple Bottom Pattern Examples
Examples can be very helpful in understanding the triple bottom pattern. For instance, imagine a stock that has been in a downtrend, forming three distinct lows at $50 over several months.
Each time the price hits $50, it rebounds, indicating strong support. Eventually, the price breaks above the resistance level at $60, confirming the pattern and signaling a bullish reversal.
In the forex market, a triple bottom pattern might appear on a currency pair chart. For example, the EUR/USD pair may show three lows at 1.1000, with the price finally breaking above the 1.1200 resistance level, signaling a potential upward trend.
Below is an example of the triple bottom chart pattern.
You can include the triple bottom pattern, like other trading patterns, in your trading strategies. In brief, below are the steps to follow when trading the triple bottom pattern:
Identify the Pattern: Look for three distinct lows at roughly the same level on a price chart. Ensure that the lows are spaced out over time to confirm the pattern's validity.
Confirm the Breakout: The pattern is confirmed when the price breaks above the resistance level formed by the highs between the lows. This breakout point is where you typically enter a long position.
Set a Stop Loss: Place a stop loss below the lowest low of the pattern to manage risk effectively. This step is crucial to protect against potential false breakouts.
Take Profits: Set a target profit level based on the height of the pattern. Measure the distance from the lowest low to the resistance level and project it upwards from the breakout point.
The triple bottom is often viewed as a reliable signal for a potential bullish reversal, which can indicate a good opportunity to enter a long (buy) position. This pattern generally forms after a downtrend when the price hits a support level three times and fails to break below it.
Once the price breaks above the neckline (as explained above), it confirms that buyers are taking control. Traders often look at this breakout as a strong buy signal, hoping to ride the price up during the reversal.
Place a stop loss in triple-bottom pattern trading to manage risk. Ideally, the stop loss should be set slightly below the pattern's lowest low.
This placement ensures that if the price unexpectedly drops below this level, you can minimize your losses.
For instance, if the lowest low is $50, setting a stop loss at $48 can help safeguard your position.
To set a profit level when trading the triple bottom pattern, start by measuring the height of the pattern.
Height of the pattern = highest point of the intermediate highs (resistance level) - lowest low (support level)
For instance, if the support level is $50 and the resistance level is $60, the pattern's height is $10.
Once you have this measurement, project this distance upwards from the breakout point. If the price breaks out above the resistance level at $60, add the height of $10 to the breakout price, setting your profit target at $70.
This method provides a structured and reliable way to estimate potential gains, ensuring you have a clear exit strategy based on the pattern's formation.
Combining the triple bottom pattern with other technical chart patterns can enhance your trading decisions and give you more confidence before taking a position.
The triple bottom alone is a strong signal of a potential bullish reversal, but when paired with other patterns, it can create a more comprehensive trading strategy.
For instance, traders often combine it with patterns like double bottoms or head and shoulders, which also indicate reversals. A head and shoulders pattern forming right after a triple bottom breakout can strengthen the bullish case.
You could also pair the triple bottom with trendlines, channels, or even flag patterns to understand the broader context of the price action.
This approach offers a "safety net" by using multiple signals to confirm that the trend is truly reversing and that the market momentum is shifting in your favor.
Trading the triple bottom pattern becomes even more effective when combined with technical indicators. Indicators help confirm the breakout and provide signals on whether the momentum is truly shifting from bearish to bullish.
Let's check some of the best indicators to use alongside the triple bottom pattern.
The MACD is a popular momentum indicator that can help you assess whether the trend is about to shift. When trading a triple bottom, watch for a bullish crossover on the MACD.
This occurs when the MACD line (the difference between two moving averages) crosses above the signal line (a moving average of the MACD line), indicating that bullish momentum is picking up.
If you see a bullish MACD crossover at the same time the price breaks above the triple bottom’s neckline, it’s a strong signal that the reversal is gaining strength.
You could then consider entering a long position. MACD also helps in identifying whether the market is overbought or oversold, giving you more context on price momentum.
Fibonacci retracement levels are another excellent tool to use when trading the triple bottom pattern. After the price breaks above the neckline, you can use Fibonacci retracement levels to identify possible areas of support and resistance as the price moves upward.
For example, after a confirmed triple bottom breakout, you might place the Fibonacci retracement tool from the high of the previous downtrend to the low of the third bottom.
This will give you key levels (like 23.6%, 38.2%, and 61.8%) where the price might face resistance as it moves higher. It’s especially helpful for setting profit targets or placing stop-loss orders.
Volume plays a critical role when trading the triple bottom pattern. A breakout above the neckline on low volume is often a red flag and could indicate a false breakout.
On the other hand, a significant increase in volume during the breakout is a sign that the market is moving with conviction, validating the triple bottom.
You can use volume indicators like On-Balance Volume (OBV) or Volume Weighted Average Price (VWAP) to gauge market participation.
If volume spikes on the breakout, it suggests that many traders are participating in the move, which adds confidence to your bullish position. Conversely, if volume is lacking, it may be a sign to wait for further confirmation.
The RSI is another valuable tool when trading a triple bottom. RSI measures whether an asset is overbought or oversold, giving you insight into potential reversal points.
When a triple bottom forms and the RSI moves from oversold territory (below 30) and starts to rise, it suggests that buying pressure is increasing, supporting the case for a bullish reversal.
You can also look for bullish divergence between price and RSI. This occurs when the price makes lower lows, but the RSI makes higher lows, signaling weakening bearish momentum.
A bullish RSI divergence combined with a triple bottom breakout can provide a strong entry point for traders looking to go long.
Make sure you avoid the below common mistakes when trading the triple bottom pattern:
Misidentifying the Pattern: Ensure that the pattern consists of three distinct lows at roughly the same level. Misidentification can lead to incorrect trading decisions.
Ignoring Market Context: Always consider the broader market trend and other technical indicators. Relying solely on the triple bottom pattern without context can result in poor trading outcomes.
Entering Prematurely: Wait for a confirmed breakout above the resistance level before entering a trade. Premature entries can lead to losses if the breakout fails.
The triple bottom pattern is a valuable chart pattern in technical analysis. It indicates a potential bullish reversal. By understanding its formation, differences from other patterns, and effective trading strategies, you can make more informed trading decisions.
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A triple bottom pattern indicates a potential reversal from a downtrend to an uptrend, showcasing strong support at a particular price level.
This pattern forms when the price of an asset hits a low point three times, with each low at approximately the same level. It suggests that the asset has found a significant support zone where buying interest consistently outweighs selling pressure.
The success rate of the triple bottom pattern can vary depending on market conditions and the timeframe in which it is observed. However, when confirmed with a breakout, it is generally considered a reliable bullish reversal pattern.
Traders often look for additional technical indicators and confirmation signals to increase the probability of a successful trade based on this pattern.
A triple bottom pattern is bullish, signaling a potential upward trend following a downtrend. The formation of three lows at a consistent support level suggests that the asset has bottomed out and that the downward momentum is waning, paving the way for a bullish reversal.
After a triple bottom pattern is confirmed with a breakout above the resistance level, the price typically continues to rise, indicating a bullish reversal.
This breakout signifies that the buying pressure has overcome the selling pressure, leading to a shift in market sentiment from bearish to bullish and often resulting in a sustained upward trend.
A triple-top pattern is generally a bearish sign, indicating a potential downward reversal. This pattern forms when the price of an asset reaches a high point three times, with each high being at roughly the same level, demonstrating strong resistance.
The inability to break above this resistance suggests that the asset is facing significant selling pressure, which could lead to a decline in price.
SEO Content Writer
Nathalie Okde is an SEO content writer with nearly two years of experience, specializing in educational finance and trading content. Nathalie combines analytical thinking with a passion for writing to make complex financial topics accessible and engaging for readers.
Market Analyst
A market analyst and member of the Research Team for the Arab region at XS.com, with diplomas in business management and market economics. Since 2006, she has specialized in technical, fundamental, and economic analysis of financial markets. Known for her economic reports and analyses, she covers financial assets, market news, and company evaluations. She has managed finance departments in brokerage firms, supervised master's theses, and developed professional analysis tools.
This written/visual material is comprised of personal opinions and ideas and may not reflect those of the Company. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. XS, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same. Our platform may not offer all the products or services mentioned.
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