Bearish
Pattern
type
Mar 21, 2018
Emerged on
Apr 10, 2018
Pattern confirmed

Statistics

since January 2000

20278

TOTAL # OF PATTERNS

39.81%

CORRECT PREDICTIONS

Calculated by A.I. for all supported tickers and confirmed Three Falling Peaks patterns

• with confidence above 30%
• with distance to target price above 7%
 

Three Falling Peaks

— — — BR — Breakout line      — — — TR — Target line
pattern image

Three Falling Peaks pattern

Three Falling Peaks

The Three Falling Peaks pattern forms when three minor Highs (1, 3, 5) arrange along a downward­-sloping trend line.

This pattern often emerges at the end of a rising trend, when a security slowly rolls over. It potentially indicates sellers moving ­in to replace buyers, which pushes the price lower.

Trading Idea

If the price breaks out from the bottom pattern boundary, day traders and swing traders should trade with the DOWN trend. Consider selling the security short or buying a put option at the downward breakout price level. To identify an exit, compute the target price by subtracting the pattern’s height (maximum price minus minimum price within the pattern) from the breakout level ­ the lowest low. When trading, wait for the confirmation move, which is when the price moves below the breakout level.

To limit potential loss when price suddenly goes in the wrong direction, consider placing a stop order to buy back a short position or sell a put option at or above the breakout price.

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