Triple Bottoms and best trading strategy
Published by bestsignals on October 27, 2018
Downward price trend
The short-term price trend leading to the triple bottom is down.
Three minor lows are involved in a triple bottom. Sometimes they can be one-day price spikes or
wider, more rounded turns. Each valley tends to look similar to the others.
Each minor low should bottom near the same price. Rarely will all three bottom at exactly the same price, so be flexible.
Price must confirm the triple bottom by closing above the highest peak between the three bottoms.
Triple bottoms are three valleys that bottom near the same price. The chart pattern acts as a bullish reversal of the downward price trend.
Price must trend downward into a bottom and upward into a top. That trend is what qualifies the chart pattern as a bottom or top, respectively. Without the trend, then you do not have a reversal pattern
If the middle peak of an alleged triple bottom is significantly below the other two, then it is probably a head-and-shoulders bottom.
best trading strategy for Triple Bottoms
Wait for confirmation
Since most triple bottom formations continue heading down,
always wait for price to rise above the highest high reached in
the formation (the confirmation point).
Wait for throwback Almost two-thirds of the formations throw back to the breakout
price, so consider waiting for the throwback before investing or
adding to your position.
Compute formation height from highest high to lowest low in
the formation. Add the height to the highest high. The result is
the expected minimum price move.
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