The triangle chart pattern is formed by drawing two converging as price temporarily moves in a sideways direction. Traders often look for a subsequent breakout, in the direction of the preceding trend, as a signal to enter a trade.
Learn Difference between Symmetrical and Other Triangle Pattern:
The difference between the symmetrical and the other triangle patterns is that the symmetrical triangle is a neutral pattern and does not advice in any direction. While the triangle itself is neutral, it still favors the direction of the existing trend and traders look for breakouts in the direction of the trend.
Symmetrical triangle trading strategy
Triangles provide an effective measuring technique for trading the breakout, and this technique can be adapted and applied to the other variations as well.
Its important to note that finding the perfect symmetrical triangle is extremely rare and that traders should not be too hasty to invalidate imperfect patterns. Traders ought to understand that triangle analysis is less about finding the perfect pattern and more about understanding what the market is communicating, through price action.
TRADING WITH TRIANGLE PATTERNS: KEY THINGS TO REMEMBER
Always be remember of the direction of the trend prior to the consolidation period.
Make use of upper and lower to help to identify which is being formed.
Use the measuring technique to decide achievable target levels
Stick to sound risk management practices to mitigate the risk of a false breakout and ensure a positive risk to reward ratio is maintained on all trades.