Technical Analysis Trading Methods and Techniques (Collection)

Chapter 4. Three Peaks

“The chief characteristic of this movement, as of the whole chart, is that the average makes rapid upside progress, but keeps going for only a short time. In between brief spurts, the average goes through long stretches of consolidation, or sideways movements.”¹ —George Lindsay

It is very easy to find the Three Peaks formation on a chart given the Separating Decline that follows. Once you understand the Three Peaks formation, you will begin seeing it everywhere. “It is not unduly technical. All you have to do is fix a couple of shapes in your mind and then look at the charts with fresh eyes.” At that point, the challenge will be to make certain that the Three Peaks pattern you have identified fulfills the requirements, ...