Being a “bull” means relying mainly on technical analysis and a variety of chart patterns. They ensure a deeper market analysis as well as the ability to look at the situation from a different angle. While some patterns make it possible to identify the real asset price or potential reversal, others help to spot the best buyer entry position. This is actually what a triple bottom pattern necessary for.
The bottom pattern provides a visual interpretation of bulls (buyers) taking control over the price action from bears (sellers). It generally introduces the formation of three equal bouncing lows between the support and resistance with a chance to identify the best market entry point and establish a strong bullish position.
Tips to read a triple bottom pattern
Before using a particular pattern, you need to clearly understand what it actually tries to tell you. Otherwise, you will not be able to read it. As a rule, bears are controlling the market during a prolonged downtrend. So, the main idea of the triple bottom is to follow that downtrend and let bulls keep control over the price action.
As stated earlier, the pattern forms three major bottoms that can be interpreted in the following way:
- 1st Bottom - a natural price movement that can be considered normal.
- 2nd Bottom – comes as an inadequate move providing a bullish sign for buyers to be prepared, as the possible reversal is about to occur.
- 3rd Bottom – means that bears are about to capitulate, as the price is likely to break through the resistance levels.