The Three Rising Valleys Set-Up
Three successive lows, each higher than the last, under a ceiling formed by the rallies between them — a base that announces itself before the level goes.
MadStockAlerts Research · Updated September 4, 2026
What to take away
- Three higher lows is a sequence rather than a coincidence, which is what makes this stronger than two.
- The highest of the intervening peaks is the level the set-up completes through.
- The line under the three lows is the invalidation, and it rises with each one.
- It is close kin to the ascending triangle; the difference is that the ceiling here need not be flat.
- The shape is visible well before the break, which is unusual among reversals and is most of its value.
MAD Academy Training Video · 1:24
Three lows, each one higher
Less famous than a double bottom and a stronger statement. Why three is the number, and why this is the rare reversal you can see coming.
This lesson is part of a Stock Alerts + Tools plan.
The shape
A decline bottoms, rallies, comes back to a low above the first, rallies again, and makes a third low above the second. Three troughs stepping upward, with two or three rallies between them reaching roughly similar prices, so a ceiling can be drawn across the peaks and a rising line under the valleys.
It is not a tidy geometric pattern and does not need to be. Where an ascending triangle demands a flat ceiling, this shape asks only that the lows are rising — which makes it much more common, and makes the drawing much less of an argument.
- Three distinct lows, each measurably above the last, separated by real rallies.
- A decline of substance into the first valley, so there is something being reversed.
- Volume falling with each successive valley.
- Rallies between the valleys that reach similar prices, giving a ceiling to break.
Scroll the chart sideways to see all of it.
Why it forms
Each valley is an attempt to sell the market down, and each one stopping higher than the last means the attempt is being met earlier. That is the same statement the rising lows of an ascending triangle make, and it is the most direct evidence available that supply is being absorbed.
Three is the number because two is a coincidence and three is a sequence. Any decline produces one higher low eventually; producing three in a row, on falling volume, at rising prices, is a much harder thing for a market to do by accident, and it is why this shape carries more weight than a double bottom despite being less famous.
The value here is timing rather than accuracy. Most reversal shapes are only recognisable once they have completed — the neckline of a head and shoulders is the last thing to appear. Three rising valleys is visible while the third one is forming, which gives a reader a structure to watch rather than an event to react to.
| What to look at | Set-up intact | Set-up failing |
|---|---|---|
| The valleys | Each one clearly above the last | Level, or the third one lower |
| Volume across them | Falling with each successive valley | Heaviest at the third |
| The rallies between | Reaching similar prices, giving a ceiling | Each one stopping lower than the last |
The price points that define it
A set-up is a shape plus a handful of prices. The shape is what makes it recognisable; the prices are what make it something that can be measured, reviewed afterwards and argued about honestly. These are the levels this one is read from.
| Level | Where it sits | What it tells you |
|---|---|---|
| The ceiling | The highest of the peaks between the valleys | The reference the set-up completes through, and the price that turns the sequence into a confirmed base. |
| The rising line | Drawn under the three valleys | The floor of the reading. It rises with each valley, so it is closer to price than the first low ever was. |
| The third valley | The most recent and highest of the lows | Where the reading stops holding, because below it the sequence of rising lows the whole shape rests on has ended. |
| The height | Ceiling minus the first valley | What the measured objective is scaled to, taken from the deepest point rather than the most recent one. |
Where the set-up completes
- 1The triggerThe set-up completes on a close above the ceiling formed by the intervening peaks. Because the valleys are rising, that ceiling is approached from progressively closer each time, and a break arriving from the third valley requires a much smaller move than one from the first would have.
- 2Where the reading stops holdingThe reading stops holding below the third valley. Using the first valley instead is a common mistake and a costly one: the pattern's claim is about the sequence, and one low that fails to hold above its predecessor ends the sequence regardless of where the original bottom was.
- 3The measured objectiveThe conventional measured objective adds the height of the structure — ceiling to the first valley — to the breakout. Because the first valley is the deepest, that number is generous, and it is reached less often than the break follows through.
- 4Through the moveThe convention watches whether the rising-lows sequence continues after the break. A market that clears the ceiling and then makes a fourth low above the third is behaving exactly as the pattern described; one that clears the ceiling and immediately makes a lower low has produced a false break out of a base that had otherwise been well-behaved.
Each of these describes where a convention puts a level, not what anybody should do at it. Whether a level is worth acting on at all is a question about position size, cost and the rest of a plan, and the answer differs for every account.
How often it follows through
One of the stronger bands in this group, because the pattern requires three separate confirmations rather than one shape. It falls sharply if the third valley is not clearly above the second, and if the rallies between the valleys are getting weaker rather than reaching similar levels.
Read that as a floor rather than an expectation. A set-up that follows through two times in three still leaves one in three that does not, and the one that does not can move further and faster than the two that did. That arithmetic is what position sizing exists to answer, and no pattern improves it.
What this number is not
It is not our record, it is not a forecast for any particular chart, and it is not the rate at which the measured objective is reached — that is always lower. It is a conservative reading of how often a completed three rising valleys kept going before it went back through the level that invalidates it. Base rates move with the market, the timeframe and the exact definition used, and every one of those varies.
What failure looks like
The failure is a fourth valley that goes the wrong way. The sequence breaks, price drops below the third low and usually below the second, and what looked like a base becomes a slower stage of the same decline. This is a gentler failure than most reversals produce — there is no violent reversal, just a sequence quietly ending — which makes it easier to recognise early and easier to ignore.
- The rallies between the valleys are each stopping lower than the last.
- The third valley forms on the heaviest volume of the three.
- Price makes a low that fails to hold above the previous valley.
Scroll the chart sideways to see all of it.
Seeing it on a live chart
This is the reversal shape that gives warning, so it is the one worth marking while it is still forming. Note the ceiling and the third valley when the third low appears, and the structure resolves itself in front of you rather than behind you.
Open your watchlist — for members