As a student of technical analysis, you know that no chart pattern is foolproof. Even if you identify the formation and execute the trade 100% according to the rules, studies show that proper technical analysis is right about 55-60% of the time — and that’s fine! You don’t need to be right every time; you just need to be right a little more often than you’re wrong to make money.
But what if you’re wrong about the chart pattern to begin with? What if you think it’s one formation, when it’s actually another? This will reduce your odds of being right, pushing them to a coin flip or, in some cases, to less than 50-50.
The Triple Top is one pattern that can really throw a monkey wrench into the plans of all but the most careful technical analysts. If you’re not careful, you can mistake several other formations — a double top, a double bottom, or a triple bottom — for a triple top. This video will show you how to avoid this mistake.
In this episode, you’ll learn:
- What a triple top is and what it means (0:37)
- How volume relates to the triple top (1:23)
- How to trade a triple top (2:16)
This video also takes an in-depth look at a real-life triple top — and I didn’t cherry-pick the “most perfect” example, either. Instead, we look at a triple top that is most like one you’re likely to find “in the wild” — it isn’t 100% perfect, but it fits the criteria and behaves like it’s supposed to.
Triple Top is a bearish reversal pattern consisting of three roughly equal highs and a support line that is ultimately pierced to the downside. It is very easy to mistake a triple top for another formation: Most notably a double top or a triple bottom. How do you tell for sure if a formation is in fact a triple top? The answer can be found in this episode.
Happy Trading!
Manny Backus
CEO, Wealthpire Inc.
P.S. Next week I’ll show you how to use the Chalkin Money Flow technical statistic, a great and non-proprietary measure of Accumulation/Distribution.
Episode 41 – The Triple Top: A Bearish Reversal Pattern
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Richard Rochon
