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Triple Bottom

A reversal pattern that forms at the end of a downtrend, when price makes three troughs at roughly the same level. It completes when price rises above the neckline drawn through the two peaks between the troughs. It can signal that price failed to break below the same level three times and that the downtrend is losing strength.

Neckline Trough 1 Trough 2 Trough 3 Breakout h
The orange dots mark the two peaks that define the neckline. h is the depth of the troughs below the neckline.

How it forms

  1. Prior downtrend. The pattern is a reversal signal. It needs a clear downtrend before it.
  2. First trough and first peak. Price makes a new low, then recovers visibly to a peak. A figure often quoted for daily charts is a rise of about 10% or more from the trough. On lower timeframes it can be smaller.
  3. Second trough and second peak. Price falls again, stops near the first trough and recovers once more. The second peak often ends near the first.
  4. Third trough. Price drops to the same level a third time but cannot get below it. The three troughs are usually within about 3% of each other. They are separated by a clear stretch of time, not just a few candles.
  5. Neckline. A line joining the two peaks. If the peaks are not level, a horizontal line through the higher one is often used instead.
  6. Completion. The pattern is complete when price closes above the neckline. Until then, three troughs are only a possibility.

The figures are approximate. They are commonly accepted textbook values, not hard limits.

What it suggests

Buyers push price back up from the same level three times. Each time, sellers reach that level but lack the strength to get below it. This can show that buying interest is still there and that the downtrend is tiring. A break above the neckline through the two peaks suggests that the level sellers defended twice has also been cleared.

Until the break, three troughs cannot be told apart from a sideways range. While price moves between two flat levels, the direction of the pattern is not settled. Before the neckline breaks, price can fall below the troughs and the downtrend can carry on.

When it strengthens, when it weakens

Strengthens

  • All three troughs forming in the same support zone
  • Selling volume falling at each trough compared with the one before
  • A clear rise in volume as the neckline breaks
  • Both peaks sitting at roughly the same level
  • Forming on a higher timeframe (4H, 1D)

Weakens

  • No clear downtrend before the pattern
  • Troughs forming very close together in time
  • Very low peaks between the troughs
  • The break coming on low volume
  • A strong resistance zone just above the neckline

The MarketLevelMap view

How it relates to zones

A triple bottom is the same support zone being tested three times. Its link to zones is read in three places:

  • If all three troughs fall in a support zone, the pattern shows that zone being defended three times. The troughs need not be at exactly the same price; it is enough that all three sit inside the same zone. A trough whose wick pokes below the zone but closes back inside can also count as a defence.
  • If the two peaks line up with a resistance zone, the neckline is really a resistance zone that has turned price back twice, not a single line. The break only means something once price closes above that zone.
  • The first resistance zone above the break is a more realistic reference than the measured move for where price may react again.

After the break, price sometimes returns to retest the neckline from above. The zone that was resistance may now act as support. If price closes back below the neckline in this test and stays there, the break is considered to have weakened.

When it completes

Close above the neckline (the two peaks).

When it is invalidated

Before completion: If price closes below all three troughs without breaking the neckline, the pattern is considered not to have formed. The troughs then become a level that has been lost, not support.

After completion: Even after a close above the neckline, if price drops back below it and closes below the third trough, the bullish scenario is considered invalid.

Often confused with

For general information only. Not investment advice.Last updated: