Triple top

A triple top forms when price climbs into the same resistance zone three times and gets pushed back each time. The three peaks sit at roughly the same level. The line through the two lows between them is the neckline. Think of it as a double top with one more attempt; unlike a head and shoulders, the middle peak isn't higher than the others.

The story: buyers tried three times to lift price above that resistance and failed every time. Sellers were waiting in the same place on each attempt. At the end of a rally, it tells you buyers are tiring.

Three peaks on their own aren't the pattern, though. Until price closes below the neckline, what you have is a resistance that has held three times, the top edge of a wide range. The turn is confirmed when the lows between the peaks break on a close. That changes where you trade and where your stop goes.

Start with a rally; a reversal pattern needs something to reverse. Then look for three peaks in one zone, say 1.2780, 1.2785 and 1.2776. They don't need to match to the pip. There should be clear lows between them, here both around 1.2650. That's a wide range about 135 pips tall.

Watch how price reaches the third peak. Shrinking candles, long upper wicks at resistance and closes holding below the level all say buying is fading. Sometimes the third peak wicks a few pips above the first two and snaps back. That's a sweep of the stops sitting there, and if the close holds below the level, the structure is intact.

There are two separate trades here. The first is selling a rejection at resistance. Sell at 1.2770 with a stop above the wick at 1.2795 and you're risking 25 pips; that's your 1R. Support is 120 pips below, so on paper there's room for almost 5R. Strictly, that's a sale at a range's top edge, not a triple top trade.

The second is the pattern itself: a close below the neckline. Only then is the uptrend's structure really broken. But at that point your stop above the peaks is more than 140 pips away. The textbook target projects the range's height down from the break; treat it as a rough reference at most.

Counting the pattern before it's finished. The moment price tags the third peak, people call the triple top complete, but price has only touched resistance a third time. Selling a rejection there is a valid idea; just know it's an edge trade and size the risk for that.

Selling resistance with no rejection at all. If price drives into the level on big bodies without pausing, the third attempt can end differently from the first two. Look for a sign: an upper wick, shrinking candles, a close back below the level.

Squeezing the stop just above the peaks, where everyone else's sits. The area above a resistance tested three times is a big stop pool, and price wicking into it before turning is common. Give it some room and cut the size if the distance grows.

Every visit to the same level uses up some of the sellers there. So the third test can go either way: the resistance holds once more, or this time it breaks. If the lows keep rising, meaning price reaches resistance from shallower and shallower pullbacks, the pressure is upward and a break becomes more likely.

When a strong uptrend is running on the higher timeframe, a triple top on the small chart is often just a pause. If the 4-hour trend is still up, three peaks on the 5-minute may just be a rest before the next leg.

Also check the width of the range. If there's little room between the peaks and the lows, even a sale at resistance may not leave 1R of distance to support. Selling the top edge only makes sense when the range is wide enough.