Triple Bottom Pattern is a familiar chart pattern among traders. This bullish reversal pattern is quite popular and well-known for its accuracy in indicating a shift in momentum. It can also help traders achieve high profits if used correctly. Before using this pattern in trading, it is advisable to understand what the Triple Bottom Pattern is and how to identify it.

What is Triple Bottom Pattern?

Triple Bottom Pattern is a bullish reversal chart pattern. As a major reversal pattern, it usually forms over a period of 3 to 6 months. Triple Bottom Pattern has similarities with other reversal patterns such as the double bottom pattern and the head and shoulders pattern. It is important to note that, like other reversal patterns, there must be an existing or preceding trend. In this case, the existing trend is a downtrend.

This pattern forms three lows below the resistance/neckline level. The first low is formed after a strong downtrend and then retraces back to the neckline. The pattern is completed when the price moves back to the neckline after forming the third low. When the price breaks through the neckline or resistance level after forming three lows, the bullish trend reversal can be confirmed.

Identifying Triple Bottom Pattern on a Chart

Identifying or reading this pattern on a chart can be quite easy as long as you focus on basic things such as always focusing on the end of the downtrend and focusing on patterns that have three lowest points at the same level. The way to confirm this pattern is when the price breaks above the neckline, which acts as a resistance level.

There are several conditions that must be met for a pattern to be confirmed as a Triple Bottom Pattern, namely:

There must be an existing downtrend before the pattern occurs.

Three lowest positions (lows) must be at the same level.

Volume will decrease throughout the pattern as a sign that the downtrend is starting to weaken, and the price will enter a bullish trend when it breaks the last resistance.

For the price target, a Triple Bottom that lasts for 6 months or more represents the main bottom, and the price target tends to be ineffective. Therefore, the distance from the breakout resistance to the lowest position can be measured and added to the breakout resistance for the price target.

Trading Using Triple Bottom Pattern

There are several rules to keep in mind when using Triple Bottom Pattern in trading. First, because the triple bottom is formed at the end of a downtrend, the previous trend must be a downtrend. Second, record all observations, especially if there are 3 rounding bottoms visible. Third, long positions can only be entered when the price breaks the resistance level or neckline.

In addition, just like other technical indicators to confirm reversals and help find the best price where stop-loss orders must be placed, alternative technical indicators that can be combined with Triple Bottom Pattern are required. Two indicators that are highly suitable to combine with Triple Bottom Pattern are MACD (Moving Average Convergence Divergence) and Fibonacci retracement levels.

The first is MACD (Moving Average Convergence Divergence). By combining this indicator with Triple Bottom Pattern, the crossing at the right level where the price breaks the resistance line can be found more easily. The second is Fibonacci retracement levels. This indicator can be useful as the main support and resistance area.

Conclusion

Triple Bottom Pattern has the main strength of accurately predicting trend reversals. Moreover, the pattern can also calculate how far the trend will go after it forms. However, this pattern is not a frequently occurring pattern. To increase potential profits, the use of other technical indicators such as MACD (Moving Average Convergence Divergence) and Fibonacci retracement levels is recommended. In addition, understanding how to identify this pattern should also be considered to maximize your profits.

Scalping is one of the trading techniques that is frequently used. Generally, this technique is used by traders who have the precision and patience to monitor price charts for hours on end in a single day. Scalping trading is quite promising, although it certainly has its own risks.

Before discussing more about the taboos in scalping trading, it's better if you first understand what is meant by scalping trading itself.

What is Scalping?

Scalping is a trading activity that uses a strategy with a very short time period. This trading strategy can be carried out within seconds to minutes. This strategy is quite aggressive, with a trader's high concentration to read asset price movements in the market.

There are several advantages that a trader can gain by doing scalping trading. One of them is getting a profit in a fairly short time. As previously explained, trading using this technique is done within minutes, even seconds in a single day. Therefore, profit calculations can be obtained very quickly. Traders do not need to wait for days to get profit with this trading technique.

In addition, scalping is also done quickly. The process of buying and selling assets is done very quickly. So traders don't have to wait for trading processes that take too long. The analysis technique required by traders in this trading strategy is also not too complicated. Traders who transact with this strategy usually only need to analyze small market patterns and technical analysis.

Scalping trading does indeed sound very promising. The profits that can be obtained in a short time look very tempting. Unfortunately, this technique also has weaknesses that you need to pay attention to. One of them is that it is quite difficult and requires very high precision. Generally, scalping trading is done by experienced traders who have a high understanding of market movements, the instruments used, and so on.

Although it is carried out in a very short period of time, the profits from this trading must be accumulated thoroughly to feel the results. Because it is done hundreds of times a day, traders must have enough time to view charts and open and close positions. Basically, this technique spends quite a lot of time in a single day to get big profits.

Pay attention to these things when scalping

There are several things that traders should pay attention to when using scalping trading techniques. In addition, there are also several prohibitions that are forbidden to be done in this technique. Here are some scalping trading prohibitions that you should avoid.

Avoid Assets with Low Liquidity

The first thing that traders should avoid when using scalping techniques is assets or instruments that have low liquidity. Because this technique is done in a very short period of time, assets with low liquidity will hinder the trading process. Instruments such as minor forex pairs or crypto coins with low market valuations can cause losses due to the usually flat price charts. So make sure to choose assets with high liquidity, such as major forex or crypto with a high enough market valuation.

Slippage and Gap

In addition to low liquidity, slippage and gaps are also the biggest enemies of scalping techniques. These two aspects can cause a trader's position to suddenly experience a floating minus from the opening position.

Slippage and gaps usually occur due to low liquidity of assets or instruments. Traders should also pay attention to trading time zones. Avoid trading during the Tokyo, Sydney sessions, and holidays. These trading sessions have relatively low liquidity and often experience sideways movements.

Overtrading

One of the biggest mistakes of scalping traders is to trade out of control in excessive amounts. Although the profit from this technique is determined by trading intensity, aggressive position opening without calculating risks will cause traders to suffer losses. Overtrading generally occurs because traders subjectively open and close positions based solely on emotions.

Over-Leverage

High leverage from brokers is indeed something that needs to be considered when trading. Brokers that offer high leverage are usually recommended for traders, especially beginners. However, leverage that is too high is not profitable for scalpers. If scalpers choose leverage that is too high, it will increase the risk of a margin call.

Fake Signals

Fake signals can usually be one of the factors that trap novice traders who use scalping techniques. Fake signals usually occur due to misinterpretation of too many indicators. Using too many indicators does not always produce accurate predictions. This can actually create noise that causes confusion and panic.

Conclusion

After reading the advantages, disadvantages, and prohibitions to be avoided, are you ready to try this technique? Make sure to continue honing your skills by consistently trading, compiling a detailed journal, practicing risk management, and most importantly, controlling your emotions while trading with this scalping technique.