Education: Forming a Triple Top

In-depth analysis of a very strong trend reversal structure. The triple top is a solid signal that buyers have truly run out of steam and are giving up. This is an ideal opportunity to capture significant profits during a major market decline.
Display on the chart:
1. Pattern formation: Price touches the same resistance level three times. Each time, buyers are strongly rejected back to the support level (neckline). Forming three clear peaks.
2. Decreasing trading volume: Each attempt to break through the peak sees declining trading volume. When touching the third resistance, it appears very weak and hesitant.
What is the logic behind this?
Large funds quietly accumulate massive positions into the greed-driven group chasing the price increase. The three touches indicate an unbreakable sell order wall above. This group has run out of money to push the price higher. Once the price breaks below support, it will trigger a series of long liquidations of bullish positions.
How to trade correctly:
- Entry: Tight after the price breaks and stabilizes below the neckline. It’s better to wait for a large bearish candle with high volume.
- Stop loss: Ensure it is placed above the third peak. Protect your main capital, avoid the last manipulative trap.
- Take profit: Measure the distance from the peak to the support, then project from the breakout point downward. That is where we lock in the main profit.
Core principle:
Don’t rush. Don’t short at the top too early. Be patient and wait for the pattern to form perfectly and break support. Confidently take the profits that are rightfully yours according to the plan!
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