Do you know why chart patterns are so important?
Have you heard about the triple bottom stock pattern? We need to mention that triple bottom in stock and forex trading is an important topic.
Let’s first focus on the importance of chart patterns. Technical analysts and technical traders like chart patterns as they give a defined framework from which to make a decision about whether to buy or sell any specific market.
Thanks to chart pattern analysis, it is easier to construct trading setups that can provide defined price objectives as well as defined exit levels.
Hopefully, there is no need to earn a bachelor’s degree in finance in order to learn more about chart patterns. For example, an individual trader has the ability to learn trading chart patterns like the pros. So, the individual trader can be on par with an institutional trader when it comes to technical analysis. Moreover, the above-mentioned individual trader can also learn how to identify and use chart patterns.
It is worth mentioning that chart patterns can be used with index stock patterns, individual stocks, etc. Interestingly, all that is required is for markets to be liquid and not to be noticeably influenced by one large participant from either the demand side or the supply side.
Now, let’s take a look at various types of chart patterns.
As stated above, chart patterns play an important role. Now, let’s take a look at the types of chart patterns.
The list is quite long. So, let’s name several types of chart patterns. For example, double top, triple top, and triple bottom.
It is a good idea to gather more information about the “triple bottom stock pattern,” and “triple bottom stock chart pattern.”
As stated above, triple top and triple bottom are types of chart patterns.
Interestingly, the triple top is pretty much the same as the double top, but with three highs around the same level.
Importantly, the triple top pattern is completed when the price falls below the lowest point between the three peaks.
What about the triple bottom pattern?
As a reminder, it is the opposite of the triple top and, as in the case of the double bottom, with three lows around the same level. The triple bottom pattern is completed when the price breaks above the highest high between the three lows.
Do you know how to identify the triple bottom pattern in forex trading?
When it comes to forex trading, a triple bottom formation happens when the price of a currency pair can’t decline below a certain resistance level and bounces back three consecutive times. Due to its clear pattern – it is quite easy to spot the triple bottom pattern.
The triple bottom pattern comes at the end of a downward trend. Interestingly, it has three bottoms at the same level. Let’s not forget that the confirmation of the pattern happens when the price breaks above the neckline, which acts as a resistance level. Notably, when this happens, sellers lose control, and buyers take over.
In conclusion, it is hard to overestimate the importance of chart patterns. So, it is vital to read more about chart patterns. Also, don’t forget about the triple bottom stock pattern.