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The classic "W" formation - a powerful reversal pattern where price tests a support level twice and fails to break lower, signaling the end of a downtrend.
The Triple Bottom is a major bullish reversal chart pattern that resembles the letter "W". It forms when price makes two consecutive lows at approximately the same level, with a moderate peak (the "neckline") in between.
The pattern signals that sellers attempted to push price lower twice but failed both times at the same support level. This double rejection shows that buyers are stepping in at that level, and a breakout above the neckline confirms the reversal.
The Triple Bottom represents a dramatic shift in market psychology. After a downtrend, price reaches a low where buyers step in - this creates the first bottom. The subsequent rally fails at resistance (the neckline), and sellers push price back down.
Here's where it gets interesting: price returns to the same support level, but this time the selling pressure is weaker. Buyers who missed the first bounce are now waiting. When price fails to make a new low, it signals seller exhaustion.
The breakout above the neckline is the *moment of truth*. Shorts cover their positions, sidelined bulls jump in, and the previous resistance now becomes support. This combination creates the powerful move that typically follows a confirmed Triple Bottom.
Conservative: Enter on a close above the neckline with volume confirmation.
Aggressive: Enter on the retest of the neckline as support after initial breakout.
Place stop below the lower of the two bottoms. This is where the pattern is completely invalidated - if price makes a new low, the triple bottom failed.
Measured Move: Project the height of the pattern (neckline to bottoms) upward from the breakout point. Alternative: Use prior resistance levels and Fibonacci extensions.
Double bottoms typically offer 1:2 to 1:3 R:R based on the measured move target.
The Triple Bottom is a rare but powerful reversal pattern. Its three tests of support demonstrate that sellers have repeatedly failed to break a level, and each failure makes the eventual breakout more significant. However, because it takes so long to form, patience and proper confirmation are essential.
More rare than double bottoms, but more reliable. Three bounces off support creates a very clear level for stop placement.
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