The Triple Top Trap: Why Most Traders Get It Wrong in a Bullish Market (And How You Can Profit Instead)

The Triple Top: A Mirage in the Bullish Market?

If you’ve ever spotted a triple top pattern forming on your charts and thought, “This is it! The market’s about to nosedive!”—congratulations, you might have just fallen into one of the most deceptive traps in Forex trading.

Triple tops scream reversal—but in a strong bullish market, they often turn out to be fakeouts rather than true trend shifts. The question is: how can you tell the difference? More importantly, how can you profit from it while the rest of the market gets slaughtered?

Let’s break down the mechanics of a triple top, expose common trader mistakes, and reveal ninja tactics to exploit this pattern for maximum gains instead of falling for the bait.

Why Most Traders Misinterpret the Triple Top in a Bullish Market

At first glance, the triple top appears to be a textbook bearish reversal signal. Price touches resistance three times, fails to break through, and traders prepare for a dramatic sell-off. But here’s the kicker:

• In a strong bullish market, this setup often fails.
• Retail traders short too soon, only to watch price skyrocket.
• Liquidity hunters (aka big players) use triple tops to trap traders before launching a breakout.

The Hidden Truth: Smart Money Exploits the Triple Top Misconception

Retail traders love to jump in early, setting their stop losses just above resistance. Big institutions? They love this. Why? Because this creates the perfect setup for a stop-loss raid before an explosive breakout.

Here’s what actually happens:

1. Triple top forms. Traders assume a massive drop is incoming.
2. Retail traders short aggressively at resistance.
3. Institutions trigger a fake breakdown, enticing even more shorts.
4. Massive buy orders get placed, taking price above resistance.
5. Trapped traders panic, fueling a short squeeze.
6. Price skyrockets. Institutions profit. Retail traders get wrecked.

The Counterintuitive Strategy: How to Profit Off the Triple Top Fakeout

Instead of shorting a triple top blindly, flip the script. Here’s how:

1. Look for Clues in Volume & Momentum Indicators

A true triple top reversal should show declining volume and bearish divergence on momentum indicators like RSI or MACD. If the market remains strong and volume isn’t drying up, the pattern is likely a trap.

Pro Tip: If RSI isn’t making lower highs while price retests resistance, the market is still bullish.

2. Watch for the Liquidity Grab (Stop-Hunt Move)

Before the real breakout, institutions often push price slightly below the previous swing low to trigger stop losses from early long positions. If you see price sweep liquidity and then recover—that’s your buy signal.

Entry Point: Enter long once price reclaims the fake breakdown zone.

3. Trade the Breakout Instead of Fighting It

If price closes strongly above the triple top with increased volume, it’s not a reversal—it’s a breakout. Instead of shorting, ride the bullish momentum.

Pro Tip: Wait for a retest of the breakout zone (previous resistance turned support) to confirm strength before entering.

Real-World Case Study: The EUR/USD Triple Top Fakeout (2023)

In late 2023, EUR/USD formed a textbook triple top around 1.1000, luring in short sellers. However:

• Volume remained high—a key sign of institutional buying.
• Price didn’t reject sharply—instead, it hovered near resistance, absorbing sell orders.
• A false breakdown occurred below 1.0970 before price shot up to 1.1150.

Result: Retail traders who shorted lost big, while smart money traders who anticipated the breakout capitalized on the move.

Insider Secrets: Ninja Tactics to Master Triple Tops in a Bullish Market

1. Use the Wyckoff Method – Smart traders don’t just look at patterns; they understand accumulation and distribution. If a triple top forms during a re-accumulation phase, odds favor a breakout, not a reversal.
2. Monitor COT Reports – The Commitment of Traders (COT) report reveals institutional positioning. If smart money is still net-long, don’t bet against them.
3. Utilize Order Flow Data – Tools like Depth of Market (DOM) show where real liquidity sits. If heavy buy orders persist above resistance, it’s a sign that a breakout is brewing.
4. Wait for a Confirmation Candle – If price closes above the triple top with strong bullish momentum, that’s your green light to go long.

Final Thoughts: Don’t Be a Liquidity Snack

The triple top is one of the most misunderstood patterns in Forex. In a strong bullish market, it often serves as a bull trap for retail traders who short too early. Instead of fighting the trend, use it as a launchpad for profits.

✅ Key Takeaways:

• A triple top is not always bearish—watch for fakeouts.
• Institutions exploit retail traders’ stop-losses before breakouts.
• Use volume, liquidity sweeps, and momentum indicators to confirm moves.
• Trade with smart money—don’t fight it.

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Image Credits: Cover image at the top is AI-generated