Classic Pattern - Symmetric Triangle

Symmetric Triangles form when the markets are in indecision mode. The Symmetric triangles can be easily detected when prices make alternate "lower highs" and "higher lows" in upside and downside slopes defining a symmetry. Symmetric triangles form when supply and demand are near equal resulting in market indecision. Most triangles result in a clear breakout and breakdown in the direction of the prior trend.




Trade: Trades are only initiated at the trend line breakouts of the Triangle. Enter trades only when Symmetric triangle breakouts (breakdown) are confirmed by price trading one or two ticks above or below the breakout (breakdown) bar's high (or low).

Target: Most Symmetric triangles result in 100% of the depth rise (fall) of the entire triangle range in the direction of the breakout. Partial trade exit targets are set at 50% of the depth from the trade entry. Protect targets by using trail stops.

Stop: Symmetric triangle failures occur when price results in false breakouts. Stop below the first major swing low below the trend line for a long setup. Place a stop order above the first major swing high from the trend line for a short-setup.