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 breakdowns are confirmed by price trading one or two ticks above below the breakout breakdown bar's highllow.
Target: -
Most "Symmetric triangles" result in 100% of the depth riselfall 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.
How To Draw A Symmetrical Triangle:-
• You will see price moving up and down but this up and down movement is converging to a single point.
• You need a minimum of 2 peaks and 2 troughs to draw the two trendlines on both sides.
• It will be only a matter of time before price breaks out of the pattern and either moves up or down.
Two Simple Ways To Trade The Symmetrical Triangle:-
#1: Trade the Initial Breakout
The best way is to confirm that the breakout actually happens with a candlestick before placing your order. What I do I is for example, say I’m watching a symmetrical triangle form in the 4hr charts and I know that soon a breakout will happen. I then switch to the 1hr chart to wait for the breakout to happen. If a 1hr candlestick has broken the triangle and closed below/above it, that’s my trade entry signal. So I will place a pending buy stop/sell stop order to catch the breakout from there.
Often I want to make sure that the 1hr candlestick closes outside of the triangle before I enter a pending buy stop or sell stop order to capture the move that happens to avoid false breakouts while the candlestick has not closed yet.
#2: Trade the retest of the trendline that is broken:-
• The second way to enter is to wait for a retest of the broken trendline in the triangle pattern then either buy or sell.
• This may also be handy if you had an extremely long breakout candlestick on the initial breakout, you best option is to wait for a retest of the breakout trendline then if that happens you enter.
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