An invented price line: three peaks at about the same height after a rise, two dips between them, and then a fall, outlined by a level across the three tops and a support line under the two dips.
An invented chart, drawn to show the shape of a triple top. Not market data.
Also searched astriple top chart pattern · triple top reversal · three peaks · triple bottom
How to recognise a triple top
- A rise comes first.
- Three peaks at roughly the same price, none clearly higher than the others.
- Two dips between them that stop at about the same level.
- A close below that level.
What it is taken to mean
It is read as three failed attempts at the same level. Each time the price reached it, sellers were there. When the support under the dips then gives way, traders take it as a sign that the rise may have ended.
That is a reading, and no more. A pattern is a description of what a price did, not a forecast of what it will do. Textbooks file this one under “reversal shapes”, which is a habit of naming and not a rule the market keeps.
How it is conventionally measured
The textbook measure is the height from the support line to the tops, taken down from the support line. It is a convention for the size of the shape and not a prediction.
What traders check
- Whether the three peaks are level. If the middle one stands clearly higher, textbooks call the shape a head and shoulders instead.
- Whether support has broken on a close.
- Whether the same picture is simply a trading range, which may break either way.
Where people go wrong
- Deciding it is a triple top before support has broken. Until then it is a rectangle.
- Assuming a level is stronger for having held three times. It has also been tested three times.
- Treating the textbook measure as a destination.
On a real chart
Textbook shapes are rare. A real chart is ambiguous: the peaks are uneven, the lines can be drawn two or three ways, and the same candles are a triple top to one reader and something else to another. Most shapes are also recognised only once they are finished, which is after the move they are said to announce has begun.
The picture on this page is invented. It was drawn by hand to show the shape as plainly as possible, with every awkward detail left out. It is not market data and it records nothing that happened.
Questions people ask
- What is the difference between a triple top and a head and shoulders?
- In a triple top the three peaks are about level. In a head and shoulders the middle peak is clearly the highest. On a real chart the difference is often a matter of opinion.
- Is a triple top more reliable than a double top?
- Some textbooks say so. The claim is hard to test, because clean examples are few and are picked out afterwards. It is safer to treat both as descriptions of where a price turned.
- Does a triple top predict a fall?
- No. It describes what a price did while the shape formed. Published studies of chart patterns disagree about whether they tell anything about the next move, and the tidy examples in textbooks were chosen afterwards, when the outcome was known. It is one observation to weigh with others.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern described here says nothing certain about what a price will do next.