NSE:SBIN STATE BK OF INDIA
Prints when the market is indecisive. Price market higher lows & lower highs. It is the situation where are near to equal. The trading range becomes smaller and smaller within the triangle. It represents a pause in the exhausting trend after which the original trend is resumed.
1) The minimum requirement for a triangle is four reversal points. Many have 6 point requirements but at least four points.
2) In a symmetrical triangle, we get apex where two converged meets. Apex also works as a very important . Sometimes a return move will occur back to the penetrated after the breakout occurs.
3) Duration: A minimum duration of 3 weeks and it rarely exceeds 3 or 4 months long. (less than 3 weeks of duration likely to be a formation, not a symmetrical triangle)
4) Volume: Narrow within the triangle. Very low before the breakout.
5) Breakout: Price closing below the lower rising confirms the breakout or Price closing above the upper falling confirms the breakout. The direction of the break in the pattern can only be confirmed after the break has happened. Either Up or Down.
6) Buy: Buy the Stock a day after Price closing above the upper falling .
Sell: Sell or short the stock day after Prices closing below the lower rising .
7)Target: – The technical price target is to measure the widest distance of the symmetrical triangle, Add the distance to the upper breakout price for a buy target or Subtract the distance from a lower breakout price for obtaining a covering price.
8) SL: usually, price closing above falling upper is a Sell stop loss or price closing below rising bottom is a buying stop loss. But very often, the gap between breakout price and is very wide.
Stop: "Symmetric triangle" failures occur when price results in false breakouts. Stop below the first major "swing low" below the for a long setup. Place a "stop" order above the first major swing high from the for a short-setup.
9) Alert: To receive a valid signal, a closing price has to be above the resistance line or below the support line. The more the price moves to the very end of a triangle, the weaker will be the breakout in either direction.
10) Symmetrical triangle has two merging . For this formation, at least two peaks and two valleys are necessary. To reduce false breakouts, investors should wait until there are either three peaks and two valleys or three valleys and two peaks. With this approach, however, it is possible to completely miss a trend,
How to avoid fake outs?
1. 200 confirmation
2. Use trail SL