The “Triple bottom” model appears after a rather long downtrend. After passing certain limits, the figure gives a signal about the market reversal. It is this ability of this chart that advanced traders use. They know exactly when the most favorable time comes for entering the market.
For an exact figure search, remember to remember some rules:
- the model is formed long enough (1-2 months);
- the ideal figure has vertices on one line of support;
- The completed figure indicates that the uptrend is broken.
The duration of the price reduction is proportional to the power of the upward movement. In view of this, experts advise that this model be defined on the D1 daily chart. It should be borne in mind that the figure is completed to form after the price reaches the lowest value 3 times.
Remember that the “Triple bottom” occurs after a clear manifestation of the southern trend. It is required to open a deal immediately after breaking through the resistance. If necessary, set a stop loss slightly below the level. It is not advisable to take a very far stop loss from the entry point. In practice, investors use two approaches – they trade for a pullback or for a breakdown.