A SYMMETRICAL TRIANGLE TRAP VARIATION

Triangles are one of the best continuation patterns. They are normally seen in the middle of a trend as the price halts and rebuild energy to resume in the direction of prevailing trend.

In this particular variation shown on the chart, the price breaks against the trend. It would look like as if the pattern is about to fail but the breakdown ends up in a trap. It traps most short sellers on the wrong side of the market at 6. The price then shoots up with strong momentum leaving no choice for the short sellers than to cover their positions. So instead of only breakout buyers at 7, the variation will also trigger buy orders of trapped short traders. Due to large number of buy orders at 7 the price shoots up pretty fast without any major pullbacks.
Its always good to keep such a strong weapons in your quiver and strike whenever the opportunity knocks.

It needs to be pointed here that the pattern will lose its worth as the price drifts closer to the Apex. As a rule of thumb, If the price is beyond 3/4th the length of the triangle, as shown on the chart, the pattern should be traded with caution. If the price has drifted up to the Apex, then ignore the pattern and move on to a next one.

The target for the triangle should be the height of the triangle from 1 to 2. This length measured above 7 will give us the target.
Ex. If the distance between 1 to 2 is 50 points and the breakout 7 happens at say 550, then target will be 550+50 = 600 (just an example). This is a conservative approach. Some trades would like to hold it and trail their stop loss until they get stopped out. It all depends upon one's trading style.

I hope the post would catch your interest.
Do like and comment for more educational ideas in future.

Regards
JJSingh